Determinants of Foreign Direct Investment: An Empirical Analysis for Turkey

Kalyoncu, Hüseyin; Tülüce, Nadide Sevil Halıcı; Yaprak, Zeynep Ozturk

doi:10.14706/jecoss15524

Cited by 5 publications

(2 citation statements)

References 34 publications

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“…This analysis found that the basic determinants of FDI in Turkey were Turkish GDP growth, labour cost, electricity price growth, the growth in average prices of high sulphur fuel oil, coal, steam coal and natural gas, export growth, import growth, the discount rate and country risk indexes for Turkey, the US, and the EU. Kalyoncu et al (2015) investigated the determinants of FDI for Turkey over the annual period 1975-2012. Significant positive effects of market size, openness, energy production and labour productivity on FDI inflows were found in this study.…”

Section: Empirical Studies: Country-specific Studymentioning

confidence: 99%

Determinants of Foreign Direct Investment: A Systematic Review of the Empirical Studies

Islam,

Beloucif

2023

Foreign Trade Review

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A growing body of literature is concerned with the factors that determine the inflows of foreign direct investment (FDI) into a host country. However, hardly any literature has been carried out to provide a systematic literature review (SLR) of the FDI determinants. An SLR methodology underlies this conceptual paper to evaluate and categorise a literature survey of 112 empirical studies published from 2000 to 2018. The result indicates that the size of the host market is the most robust determinant, followed by trade openness, infrastructure quality, labour cost, macroeconomic stability, human capital, and the growth prospect of the host country. Market size is highly significant in virtually all studies. This partly reflects the fact that most of the world’s FDI are market-seeking. This study provides a clear understanding of the scope of the research in the field of FDI determinants as the practical implication for future research. JEL Code: F14

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Section: Empirical Studies: Country-specific Studymentioning

confidence: 99%

Determinants of Foreign Direct Investment: A Systematic Review of the Empirical Studies

Islam,

Beloucif

2023

Foreign Trade Review

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“…According to some previous studies (e.g., Ang, 2008;Athukorala & Waglé, 2013;Lim, 2008;Luiz & Charalambous, 2009), the market size has been proved to be one of the most important determinants of FDI by numerous past empirical studies. Past studies have applied different measure of market size including gross domestic product, GDP per capita, GDP growth rate and real GDP (e.g., Cleeve, 2008;Culem, 1988;Kalyoncu, Tuluce, & Yaprak, 2015;Karim & Othman, 2005;Lunn, 1980;Voka & Dauti, 2015). Artige and Nicolini (2005) stated that majority of studies use GDP and GDP per capita as a proxy for market size and it is found that there is a positive relationship between market size and FDI inflows to the country.…”

Section: Market Size and Fdimentioning

confidence: 99%

Determinants of Foreign Direct Investment (FDI) in Asean-5 Countries: A Review

Fong Yi,

Idris,

Lily

2020

MJBE

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The foreign direct investment (FDI) inflows play an important role in achieving a countryâ€™s economic development. Hence, this study aims to investigate the main determinants of FDI inflows in ASEAN-5 countries (Indonesia, Malaysia, Philippines, Singapore, and Thailand). Using five explanatory variables (market size, inflation rate, trade openness, exchange rate and consumption tax (GST)), this study tries to investigate the factors that determine FDI inflows to the studied countries. To achieve this objective, this study will utilise Autoregressive Distributed Lag (ARDL) and Nonlinear Autoregressive Distributed Lag (NARDL) approaches to investigate the long-run relationship between the explanatory variables and FDI inflows. The NARDL model is applied to examine the asymmetric effect of exchange rate on FDI inflows. Based on a comparative discussion, the study results will demonstrate what are the common factors will attract or discourage FDI inflows into the ASEAN-5 countries. This research also indicates if FDI inflows react differently during an appreciation or a depreciation on host country currency. This study has significant implications for the body of knowledge and practitioners. The effect of GST and asymmetric effect of exchange rate will add the existing body of knowledge of FDI inflows in the studied countries. Meanwhile, policymakers from the sample countries would be able to understand the importance of the main determinants of FDI inflows to their respective countries. Hence, steps could be taken to utilize the factors to attract FDI inflows. Furthermore, knowledge about the asymmetriceffect of the exchange rate will also help the policymakers in adopting appropriate policies to accommodate the asymmetry. The sample of countries from Southeast Asian countries has not been extensively investigated in the literature regarding the GST effect and asymmetric effect of exchange rates on FDI inflows motivated this study in this area.

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