@article{article_741661, title={Outward Foreign Direct Investment and Domestic Investment Nexus in Turkey: Crowding out or Crowding in?}, journal={Ankara Hacı Bayram Veli Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi}, volume={22}, pages={913–936}, year={2020}, author={Kurul, Zühal}, keywords={Outward direct investment, domestic investment, linear and nonlinear ARDL approaches}, abstract={The last decade has witnessed a remarkable surge in outward foreign direct investment (OFDI) from developing countries. The growth of multinationals in a number of developing economies has renewed the importance of OFDI from developing countries for global investment patterns and increased the concerns about the effects of OFDI on the domestic investment in these countries. Over the last few years, the considerable rise in OFDI flows from Turkey as a newly emerged investor country has encouraged us to examine the role of OFDI on domestic investment. This paper investigates whether outward foreign direct investment (OFDI) crowds out or crowds in domestic investment in Turkey for the period of 1970-2018 by using linear and nonlinear ARDL approaches. The results provide evidence of a symmetric and negative long run relationship between OFDI and domestic investment suggesting that OFDI robustly crowds out domestic investment. Our paper highlights the need for consideration of crowding out effect in formulating policies centered upon promoting domestic capital formation.}, number={3}, publisher={Ankara Hacı Bayram Veli University}