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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.

Suggested Citation

  • Esiyok, Bulent, 2011. "Determinants of foreign direct investment in Turkey: a panel study approach," MPRA Paper 36568, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:36568
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    Cited by:

    1. Burcak Polat, 2015. "Determinants of FDI into Central and Eastern European Countries: Pull or Push Effect?," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 3(4), pages 39-47.
    2. Charles Iweze & Gbenga Daniel Akinsola & Victoria Olushola Olanrewaju, 2020. "Determinants of Foreign Direct Investment in Turkey: Empirical Evidence from ARDL Approach," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(4), pages 319-329, December.
    3. Faik Bilgili & Nadide S. Tülüce & Ibrahim Doğan & H. Hilal Bağlıtas, 2016. "The causality between FDI and sector-specific production in Turkey: evidence from threshold cointegration with regime shifts," Applied Economics, Taylor & Francis Journals, vol. 48(5), pages 345-360, January.
    4. Bulent Esiyok, 2015. "Does Inward Foreign Direct Investment Increase Imports To Turkey? An Instrumental Variables Approach," Journal Articles, Center For Economic Analyses, pages 23-35, June.
    5. Main Ud-din, 2018. "Continuity and Change in Patriarchal Structure: Recent Trends in Rural Bangladesh," European Journal of Interdisciplinary Studies Articles, Revistia Research and Publishing, vol. 4, January -.
    6. 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 6970, The World Bank.

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    More about this item

    Keywords

    Foreign direct investment; knowledge-capital framework; EU membership; Turkey;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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