Foreign Inflows, Trade and Economic Growth: Evidence From a Newly Industrialized Country

Abstract

The current paper analysis the underlying relations between Foreign Influx, Trade and Economic Growth in case of Turkey over the period 1970-2019. The novel technique of ARDL is applied to investigate the presence of a long- and short-run relationship amongst foreign inflows, Trade and Economic Growth. The findings revealed the existence of cointegrating relationship among the variables. Further, outward inflows and the export were the key elements of economic progress in the long run in Turkey. Many important inferences can be made from the estimation results in the study such as the concerned authorities should focus on increasing stockholders’ confidence in the country by reducing political uncertainty and providing favourable environment to foreign investors. Further attention should be paid towards the amount and productivity of external investment flowing in the country in such a way that optimum growth can be achieved.