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The Impact Of Foreign Direct Investment On Total Factor Productivity And Economic Growth In Turkey

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  • İbrahim Arısoy

    (Cukurova University, Turkey)

Abstract

The main objective of this paper is to estimate the contributions of Foreign Direct Investment (FDI) to the aggregate growth and whether FDI have had an impact on total factor productivity (TFP) of Turkey for the period 1960-2005 using aggregate production function. This paper argues that the two main channels through which FDI can affect host country economic growth are technology spillovers and physical capital accumulation. Further, it intends to identify the casual linkage among FDI, TFP and economic growth and then evaluates various channels through which FDI is linked to TFP using some recent econometric techniques. The empirical results indicate that FDI contributes positively to TFP and growth via capital accumulation and technological spillovers.

Suggested Citation

  • İbrahim Arısoy, 2012. "The Impact Of Foreign Direct Investment On Total Factor Productivity And Economic Growth In Turkey," Journal of Developing Areas, Tennessee State University, College of Business, vol. 46(1), pages 17-29, January-J.
  • Handle: RePEc:jda:journl:vol.46:year:2012:issue1:pp:17-29
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    More about this item

    Keywords

    Growth; Total Factor Productivity; Foreign Direct Investment; Spillover Effects;
    All these keywords.

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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