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A Comparative Analysis of the Effect of Migration and Foreign Direct Investment on Trade in the Context of the Factor Mobility

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  • Hande Aksoz Yilmaz

    (Kırsehir Ahi Evran Universitesi, Iktisadi ve Idari Bilimler Fakultesi, Iktisat Bolumu, Kirsehir, Turkiye)

Abstract

This study investigates the effect of immigration and foreign direct investment on trade within the framework of factor mobility. Hence, we used annual data, spanning the period of 2000–2018, and immigration flows to Turkey’s major trade partners (Germany, France, Italy, UK, and the United States). The inward foreign direct investment flows to Turkey from these countries. However, exchange rates, foreign employment, globalization index, and political stability index variables affect trade. The findings show that migration flows from Turkey to five countries and have more impact on trade, compared to inward foreign direct investment to Turkey over the period of 2000–2018. Furthermore, when the fundamental assumptions of traditional foreign trade theories are ignored, parallel results are obtained, indicating that factor movements and trade are complementary.

Suggested Citation

  • Hande Aksoz Yilmaz, 2021. "A Comparative Analysis of the Effect of Migration and Foreign Direct Investment on Trade in the Context of the Factor Mobility," Journal of Social Policy Conferences, Istanbul University, Faculty of Economics, vol. 0(81), pages 127-150, December.
    • Handle: RePEc:ist:iujspc:v:0:y:2021:i:81:p:127-150
    DOI: 10.26650/jspc.2021.81.903847
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