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Determinants of foreign direct investment in Turkey: a panel study approach

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  • Esiyok, Bulent

Abstract

This study examines the determinants of foreign direct investment (FDI) using a panel of bilateral outward FDI stocks of 19 OECD countries in Turkey between 1982 and 2007. Employing a knowledge-capital model, this study finds that joint national incomes, per capita difference, investment liberalisation and the cost of exporting to Turkey have significant effects on FDI in Turkey. In addition, the prospect of European Union membership, government stability, infrastructure, bilateral exchange rate, exchange rate volatility and openness to trade play an important role in determining the amount of FDI in Turkey. Finally, this study finds that high relative unit labour costs and corruption provide stimuli to FDI.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36568.

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Date of creation: 19 Jul 2011
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Handle: RePEc:pra:mprapa:36568

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Keywords: Foreign direct investment; knowledge-capital framework; EU membership; Turkey;

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Cited by:
  1. Sanchez Martin, Miguel Eduardo & Escribano Frances, Gonzalo & de Arce Borda, Rafael, 2014. "How regional integration and transnational energy networks have boosted FDI in Turkey (and may cease to do so): a case study: how geo-political alliances and regional networks matter," Policy Research Working Paper Series, The World Bank 6970, The World Bank.

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