IDEAS home Printed from https://ideas.repec.org/a/arp/tjssrr/2019p789-795.html
   My bibliography  Save this article

The Determinants of Foreign Direct Investments in Real Estate: Turkey Case

Author

Listed:
  • Mustafa ŞİT

    (Harran University, Faculty of Tourism and Hotel Management, Şanlıurfa, Turkey)

Abstract

The aim of this study is to investigate the key factors affecting foreign direct real estate investment (FDIRE) in Turkey’s economy. A DOLS-FMOLS estimator model was developed to investigate the determinants of FDIRE in Turkey. Data was used between 2003Q1-2018Q2. This study differs from the previous ones in that this particular topic is being researched as regards the economy of Turkey for the first time. The results showed that the most important variables affecting foreign direct real estate investment in Turkey was openness and exchange rate. Furthermore, economic growth also has a positive impact. On the other hand, interest has been found to be the most negative factor affecting investments. Moreover, the increase in building construction costs directly reduce foreign real estate investment. The results show that the gradually increasing openness of Turkey’s economy contributes to the increase in foreign investments in the real estate market.

Suggested Citation

  • Mustafa ŞİT, 2019. "The Determinants of Foreign Direct Investments in Real Estate: Turkey Case," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 5(3), pages 789-795, 03-2019.
    • Handle: RePEc:arp:tjssrr:2019:p:789-795
    as

    Download full text from publisher

    File URL: https://www.arpgweb.com/pdf-files/jssr5(3)789-795.pdf
    Download Restriction: no
    File URL: https://www.arpgweb.com/journal/7/archive/03-2019/3/5
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Serena Ng & Pierre Perron, 2001. "LAG Length Selection and the Construction of Unit Root Tests with Good Size and Power," Econometrica, Econometric Society, vol. 69(6), pages 1519-1554, November.
    2. C.F. Sirmans & Elaine Worzala, 2003. "International Direct Real Estate Investment: A Review of the Literature," Urban Studies, Urban Studies Journal Limited, vol. 40(5-6), pages 1081-1114, May.
    3. Peter C. B. Phillips & Bruce E. Hansen, 1990. "Statistical Inference in Instrumental Variables Regression with I(1) Processes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 99-125.
    4. Chen, Y. & He, M. & Rudkin, S., 2017. "Understanding Chinese provincial real estate investment: A Global VAR perspective," Economic Modelling, Elsevier, vol. 67(C), pages 248-260.
    5. Carlos Rodríguez & Ricardo Bustillo, 2010. "Modelling Foreign Real Estate Investment: The Spanish Case," The Journal of Real Estate Finance and Economics, Springer, vol. 41(3), pages 354-367, October.
    6. Hassan Fereidouni Gholipour & Usama Al-mulali & Abdul Hakim Mohammed, 2014. "Foreign investments in real estate, economic growth and property prices: evidence from OECD countries," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 17(1), pages 33-45, January.
    7. Hassan Gholipour Fereidouni & Tajul Ariffin Masron, 2013. "Real estate market factors and foreign real estate investment," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 40(4), pages 448-468, August.
    8. Moshirian, Fariborz & Pham, Toan, 2000. "Determinants of US investment in real estate abroad," Journal of Multinational Financial Management, Elsevier, vol. 10(1), pages 63-72, January.
    9. Hansen, Bruce E, 2002. "Tests for Parameter Instability in Regressions with I(1) Processes," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 45-59, January.
    10. Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July.
    11. Mohamed Salem & Andrew Baum, 2016. "Determinants of foreign direct real estate investment in selected MENA countries," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 34(2), pages 116-142, March.
    12. Omokolade Akinsomi & Nikiwe Mkhabela & Marimo Taderera, 2018. "The role of macro-economic indicators in explaining direct commercial real estate returns: evidence from South Africa," Journal of Property Research, Taylor & Francis Journals, vol. 35(1), pages 28-52, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Herzer Dierk, 2022. "Semi-endogenous Versus Schumpeterian Growth Models: A Critical Review of the Literature and New Evidence," Review of Economics, De Gruyter, vol. 73(1), pages 1-55, April.
    2. Bajo-Rubio, Oscar & Díaz-Roldán, Carmen & Esteve, Vicente, 2009. "Deficit sustainability and inflation in EMU: An analysis from the Fiscal Theory of the Price Level," European Journal of Political Economy, Elsevier, vol. 25(4), pages 525-539, December.
    3. Rapach, David E. & Wohar, Mark E., 2002. "Testing the monetary model of exchange rate determination: new evidence from a century of data," Journal of International Economics, Elsevier, vol. 58(2), pages 359-385, December.
    4. Elias Oikarinen & Heidi Falkenbach, 2017. "Foreign investors’ influence on the real estate market capitalization rate – evidence from a small open economy," Applied Economics, Taylor & Francis Journals, vol. 49(32), pages 3141-3155, July.
    5. Ibhagui, Oyakhilome W., 2019. "Does the long-run monetary model hold for Sub-Saharan Africa? A time series and panel-cointegration study," Research in International Business and Finance, Elsevier, vol. 47(C), pages 279-303.
    6. Riané de Bruyn & Rangan Gupta & Lardo Stander, 2013. "Testing the Monetary Model for Exchange Rate Determination in South Africa: Evidence from 101 Years of Data," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 7(1), March.
    7. Inagaki, Kazuyuki, 2021. "How are the international capital flows of rapidly aging countries affected by the elderly working longer?," Economic Modelling, Elsevier, vol. 97(C), pages 285-297.
    8. Matteo Mogliani, 2010. "Residual-based tests for cointegration and multiple deterministic structural breaks: A Monte Carlo study," Working Papers halshs-00564897, HAL.
    9. van Amano, Robert A & Norden, Simon, 1998. "Exchange Rates and Oil Prices," Review of International Economics, Wiley Blackwell, vol. 6(4), pages 683-694, November.
    10. Ansgar Belke & Robert Czudaj, 2010. "Is Euro Area Money Demand (Still) Stable? Cointegrated VAR Versus Single Equation Techniques," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(4), pages 285-315.
    11. Gregory, Allan W. & Hansen, Bruce E., 1996. "Residual-based tests for cointegration in models with regime shifts," Journal of Econometrics, Elsevier, vol. 70(1), pages 99-126, January.
    12. Guan, Jialin & Kirikkaleli, Dervis & Bibi, Ayesha & Zhang, Weike, 2020. "Natural resources rents nexus with financial development in the presence of globalization: Is the “resource curse” exist or myth?," Resources Policy, Elsevier, vol. 66(C).
    13. Masakatsu Okubo, 2011. "The Intertemporal Elasticity of Substitution: An Analysis Based on Japanese Data," Economica, London School of Economics and Political Science, vol. 78(310), pages 367-390, April.
    14. Yemane Wolde-Rufael, 2016. "Defence Spending and Income Inequality in Taiwan," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(6), pages 871-884, November.
    15. ALBULESCU, Claudiu Tiberiu & Pepin, Dominique, 2018. "Monetary Integration, Money-Demand Stability, and the Role of Monetary Overhang in Forecasting Inflation in CEE Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 33(4), pages 841-879.
    16. Nikolay Gospodinov & Ian Irvine, 2005. "A ‘long march’ perspective on tobacco use in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(2), pages 366-393, May.
    17. Rapach, David E. & Wohar, Mark E., 2004. "Testing the monetary model of exchange rate determination: a closer look at panels," Journal of International Money and Finance, Elsevier, vol. 23(6), pages 867-895, October.
    18. Haug, Alfred A., 1996. "Tests for cointegration a Monte Carlo comparison," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 89-115.
    19. Kuo, Biing-Shen, 1998. "Test for partial parameter instability in regressions with I(1) processes," Journal of Econometrics, Elsevier, vol. 86(2), pages 337-368, June.
    20. Dierk Herzer & Holger Strulik & Sebastian Vollmer, 2012. "The long-run determinants of fertility: one century of demographic change 1900–1999," Journal of Economic Growth, Springer, vol. 17(4), pages 357-385, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arp:tjssrr:2019:p:789-795. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Managing Editor (email available below). General contact details of provider: http://arpgweb.com/?ic=journal&journal=7&info=aims .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.