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Application Of Oli-Paradigm Of German Fdi Inflows In Turkey

Author

Listed:
  • Erkan Ilgün

    (International Burch University, Department of Management)

  • Kasim Tatic

    (University of Sarajevo, School of Economics)

Abstract

Foreign direct investment (FDI) plays a pivotal role in economic development. Most important advantages of this are new technology, management ability, marketing ability and modern know-how. However, the literature dealing specifically with the issue of German direct investments in Turkey is fairly sparse. Regarding this, the purpose of study is not only to explore the main determinants of German FDI inflows in Turkey, but also to increase our understanding of the relationship between FDI and its determinants. The conceptual framework used in this study was firstly designed by Dunning and became known as "The eclectic paradigm of international production". The results of a literature review about the German direct investments made in Turkey and the determinants of FDI related to the market entry are shown in the text. Portfolio investments as well as foreign debt are ignored. When considering market policy, there are numbers of investment motives that are critical for German companies, i.e. management potential and popularity. The entrepreneurs believe in "market potential, dynamics, growth", existing "High-and lows-killed" workers and "Political and economic stability" in Turkey. From the characterization of German direct investments, it is possible to conclude that the transfer of factors that influence competitiveness of German companies is major priority of companies positioned in Turkey. According to survey results, in majority of cases most advanced technology was transferred to Turkey.

Suggested Citation

  • Erkan Ilgün & Kasim Tatic, 2012. "Application Of Oli-Paradigm Of German Fdi Inflows In Turkey," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 10(2), pages 29-40.
    • Handle: RePEc:tuz:journl:v:10:y:2012:i:2:p:29-40
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    References listed on IDEAS

    as
    1. Parkhe, Arvind, 1998. "Building trust in international alliances," Journal of World Business, Elsevier, vol. 33(4), pages 417-437, January.
    2. Robert M. Stern, 2000. "Quantifying Barriers to Trade in Services," Working Papers 470, Research Seminar in International Economics, University of Michigan.
    3. Ekrem Tatoglu & Keith W. Glaister & Fuat Erdal, 2003. "Determinants of Foreign Ownership in Turkish Manufacturing," Eastern European Economics, Taylor & Francis Journals, vol. 41(2), pages 5-41, March.
    4. John H Dunning, 1980. "Towards an Eclectic Theory of International Production: Some Empirical Tests," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(1), pages 9-31, March.
    5. Parkhe, Arvind, 1998. "Understanding trust in international alliances," Journal of World Business, Elsevier, vol. 33(3), pages 219-240, October.
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    More about this item

    Keywords

    FDI; OLI-Paradigm; Turkey-Germany Relationship;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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