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Determinants of Turkish FDI abroad

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  • Kayam, Saime Suna
  • Hisarciklilar, Mehtap

Abstract

ABSTRACT This study examines the determinants of Turkish outward FDI employing a gravity model. The model estimates the impact of traditional gravity variables, as well as openness, labour productivity, infrastructure, institutions and economic stability on FDI outflows from Turkey to 11 countries, which account for approximately 90% of Turkish outward FDI stock, over the period 1999-2005 years using panel data random effects technique. The results reveal that Turkish FDI has a market-seeking pattern with foreign markets being substituted for domestic market by Turkish firms. On the other hand, economic instability in Turkey emerges as a major deterrent of FDI outflows. Additionally, our results suggest the possibility of FDI in vertically differentiated products in host countries by Turkish investors as well as the importance of push factors.

Suggested Citation

  • Kayam, Saime Suna & Hisarciklilar, Mehtap, 2009. "Determinants of Turkish FDI abroad," MPRA Paper 17813, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:17813
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    References listed on IDEAS

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    Cited by:

    1. Amat Adarov & Fatos Hoxha & Werner Laventure & Isilda Mara, 2015. "Monthly Report No. 9/2015," wiiw Monthly Reports 2015-09, The Vienna Institute for International Economic Studies, wiiw.

    More about this item

    Keywords

    foreign direct investment; gravity model; panel data econometrics;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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