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Foreign Direct Investments'Effects on the Balance of Current Account: Cointegration Analysis with Multiple Structural Breaks in Turkey, China and India Sample

Author

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  • Ismet GOCER
  • Osman PEKER

Abstract

In this study the effects of Foreign Direct Investment (FDI) on current account deficit were analyzed with multiple structural breaks unit root test of Carrion-i-Silvestre et al. (2009), multiple structural breaks cointegration test of Maki (2012) and dynamic ordinary smallest square method for Turkey, China and India by using 1980-2011 period data. According to the empirical findings; 10% increase of FDI leads to an decrease on the current account deficit in Turkey by 3%, India by 4.1%; on the contrary, it has been determined an increase on the current account surplus in China by 3.8%

Suggested Citation

  • Ismet GOCER & Osman PEKER, 2014. "Foreign Direct Investments'Effects on the Balance of Current Account: Cointegration Analysis with Multiple Structural Breaks in Turkey, China and India Sample," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 8(1), pages 87-116.
    • Handle: RePEc:bdd:journl:v:8:y:2014:i:1:p:87-116
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    Citations

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    Cited by:

    1. A. Oznur Umit & H. Isil Alkan, 2016. "The Effects of Foreign Direct Investments and Economic Growth on Employment and Female Employment: A Time Series Analysis With Structural Breaks For Turkey," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 9(3), pages 43-49, December.

    More about this item

    Keywords

    Foreign Direct Investment; Balance of Current Account; Cointegration Analysis with Multiple Structural Breaks;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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