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Investment Under Financial Liberalization: Post 1980 Turkey Case

Author

Listed:
  • Onur TUTULMAZ

    (Hitit University, Turkey)

  • Burcu DOGAN

    (Hitit University, Turkey)

Abstract

In the history of the modern state of Turkey many policies have been developed and applied in order to transform ineffective economy to a dynamic and steady one. The liberal policies have been effectively applied except for war periods. The main activity of liberal policies in Turkey s economy was conducted on January 24, 1980 with some important structural adjustment decisions. These decisions aimed to integrate the economy with the global system by applying global economic order that widely adopted all over the world. The decisions aimed also to activate a financial liberalization in the country. Financial liberalization generally includes the principles related to the removing the pressure on the interest rate, currency control and investment mobility. More liberalization steps came in 1989 aiming to increase the investment and growth. Foreign Direct Investment (FDI) was seen important for that purposes. However, short term capital flows, having been more effective in real investments than FDI, have led to several negative effects in this period. In the study some of the drawbacks of that process of financial liberalization have been discussed. The relation between FDI and Gross Domestic Product in the financial liberalization process has been tested with econometric implementation. Econometric estimation has been applied for this purpose to test this relationship for post 1980 era for Turkey as a developing country.

Suggested Citation

  • Onur TUTULMAZ & Burcu DOGAN, 2015. "Investment Under Financial Liberalization: Post 1980 Turkey Case," Expert Journal of Economics, Sprint Investify, vol. 3(1), pages 5-13.
    • Handle: RePEc:exp:econcs:v:3:y:2015:i:1:p:5-13
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    References listed on IDEAS

    as
    1. H. Aydın OKUYAN & Erman ERBAYKAL, 2008. "Gelişmekte Olan Ülkelerde Doğrudan Yabancı Yatırımlar Ve Ekonomik Büyüme İlişkisi," Ekonomik Yaklasim, Ekonomik Yaklasim Association, vol. 19(67), pages 47-58.
    2. Babajide Fowowe, 2008. "Financial Liberalization Policies and Economic Growth: Panel Data Evidence from Sub‐Saharan Africa," African Development Review, African Development Bank, vol. 20(3), pages 549-574.
    3. Marios Obwona, 2001. "Determinants of FDI and their Impact on Economic Growth in Uganda," African Development Review, African Development Bank, vol. 13(1), pages 46-81.
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    More about this item

    Keywords

    financial liberalization; foreign direct investment; economic growth;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance

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