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The Contradictions of Free Market System and The Impacts of FDI and Foreign Trade on Economy

Author

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  • Hasan ALPAGU

    (Istanbul Zaim University, Turkey)

Abstract

This paper examines the effects of the FDI and foreign trade (Exports and Imports) as well as their importance in international economic activities. A central subject the study is to examine the impact of FDI and foreign trade on the growth and prosperity status of countries. Whereby the paper examines the role of international business on the developing progress of countries. The economic growth of a country depends on the quantity and productivity of the economic factors. For that reason FDI and Import-Export are most significant economic activities, which have substantial effects on the quantity as well as quality of economic factors in any country. On the other side, customs union, quotas and regional trade pacts deactivate partly or in some cases even completely the projected effects of Smith’s absolute and Ricardo’s comparative advantages theories in the international production cooperation. The study examines this situation from a modern economic point of view.

Suggested Citation

  • Hasan ALPAGU, 2014. "The Contradictions of Free Market System and The Impacts of FDI and Foreign Trade on Economy," Turkish Economic Review, KSP Journals, vol. 1(1), pages 7-15, December.
    • Handle: RePEc:ksp:journ2:v:1:y:2014:i:1:p:7-15
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    References listed on IDEAS

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    1. Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.
    2. Brent C. Smith, 2009. "If You Promise to Build It, Will They Come? The Interaction between Local Economic Development Policy and the Real Estate Market: Evidence from Tax Increment Finance Districts," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(2), pages 209-234, June.
    3. Robert E. Lipsey, 2006. "Measuring the Impacts of FDI in Central and Eastern Europe," NBER Working Papers 12808, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Hasan ALPAGU, 2016. "Keynesian Spiritus Animales Approach and the Transformation of the Capitalist System," Turkish Economic Review, KSP Journals, vol. 3(2), pages 367-372, June.

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    More about this item

    Keywords

    FDI; Export; Import; Capitalist System; Less Developed Countries; Trade; Customs Union; Less Developed Countries; Laissez-Faire; Invisible Hand;
    All these keywords.

    JEL classification:

    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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