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The Effect Of Foreign Direct Investment On Economic Growth: The Case Of Turkey

Author

Listed:
  • Mustafa Tahir Demirsel

    (Selcuk University)

  • Adem Ö?üt

    (Selcuk University)

  • Mehmet Mucuk

    (Selcuk University)

Abstract

In developing countries adequate and necessary investment cannot be realized since their domestic savings rate is low and foreign savings rate is very low. Here FDI helps diminish domestic and foreign savings deficits. Capital account liberalization in Turkey was initiated in conjunction with the process of economic and financial reforms that started in 1980, and was fully completed in 1989. In this paper, the objective is to analyze the relationship between FDI and economic growth in Turkey by using the data covering the time period between 2002:Q1 and 2014:Q1. For this purpose unit root test, Johansen cointegration test, and variance decomposition were applied. According to the findings there is no relationship between these variables in the long run.

Suggested Citation

  • Mustafa Tahir Demirsel & Adem Ö?üt & Mehmet Mucuk, 2014. "The Effect Of Foreign Direct Investment On Economic Growth: The Case Of Turkey," Proceedings of International Academic Conferences 0702081, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:0702081
    as

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    File URL: https://iises.net/proceedings/12th-international-academic-conference-prague/table-of-content/detail?cid=7&iid=36&rid=2081
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    References listed on IDEAS

    as
    1. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    2. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
    3. repec:aer:wpaper:165 is not listed on IDEAS
    4. Abdul Khaliq & Ilan Noy, 2007. "Foreign Direct Investment and Economic Growth: Empirical Evidence from Sectoral Data in Indonesia," Working Papers 200726, University of Hawaii at Manoa, Department of Economics.
    5. Karimi, Mohammad Sharif & Yusop, Zulkornain, 2009. "FDI and Economic Growth in Malaysia," MPRA Paper 14999, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Manasseh Charles O. & Nwakoby Ifeoma C. & Okanya Ogochukwu C. & Ifediora Chuka U. & Nzidee Williams A., 2023. "The Impact of Foreign Direct Investment and Oil Revenue on Economic Growth in Nigeria," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 33(3), pages 61-85, September.
    2. Orhan Gokmen, 2021. "The Relationship between Foreign Direct Investment and Economic Growth: A Case of Turkey," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(7), pages 1-85, June.
    3. Trang Thi-Huyen Dinh & Duc Hong Vo & Anh The Vo & Thang Cong Nguyen, 2019. "Foreign Direct Investment and Economic Growth in the Short Run and Long Run: Empirical Evidence from Developing Countries," JRFM, MDPI, vol. 12(4), pages 1-11, November.
    4. Thi Thuy Hang Le & Van Chien Nguyen & Thi Hang Nga Phan, 2022. "Foreign Direct Investment, Environmental Pollution and Economic Growth—An Insight from Non-Linear ARDL Co-Integration Approach," Sustainability, MDPI, vol. 14(13), pages 1-14, July.
    5. Maha Mohamed Alsebai Mohamed & Pingfeng Liu & Guihua Nie, 2021. "Are Technological Innovation and Foreign Direct Investment a Way to Boost Economic Growth? An Egyptian Case Study Using the Autoregressive Distributed Lag (ARDL) Model," Sustainability, MDPI, vol. 13(6), pages 1-28, March.
    6. Jean Baptiste Tiémélé & Bi Goli Jean Jacques Iritié, 2023. "FDI and Economic Growth in Côte d’Ivoire: An Empirical Analysis Based on the Service Sector," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 15(12), pages 1-1, December.

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    More about this item

    Keywords

    Foreign Direct Investment; Economic Performance; Economic Growth;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F30 - International Economics - - International Finance - - - General

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