Geopolitical Alignment and Friend-Shoring: Evidence from Turkish Outward Foreign Direct Investment

Abstract

Geopolitical tensions have increasingly reshaped foreign direct investment (FDI) patterns, leading to “friend-shoring,” whereby investments are redirected toward geopolitically aligned countries. Despite growing attention, empirical evidence on the geopolitical determinants of FDI in emerging economies remains limited. This paper examines whether and how geopolitical alignment affects Turkish outward FDI (OFDI) during 2003–2023. Using panel data and a geopolitical distance measure based on UN voting similarity, the results show that Turkish OFDI declines with increasing geopolitical distance, providing strong evidence of friend-shoring behavior. However, this effect is heterogeneous. It is stronger in emerging markets but can be mitigated by better governance, particularly through stronger corruption control and greater voice and accountability. This paper also demonstrates that geopolitical alignment operates through multiple channels. Turkish OFDI responds not only to the degree of bilateral geopolitical alignment but also to countries’ positions in the US–China rivalry and their bloc affiliations. Finally, the effect of geopolitical alignment weakens after 2018, indicating that the relationship between geopolitics and OFDI evolves along with geopolitical dynamics.

Keywords

• Outward Foreign Direct Investment
• Friend-Shoring
• Geopolitical Alignment
• Institutional Quality
• Emerging Market Economies

Jeopolitik Uyum ve Dost Ülkelere Yönelim: Türkiye’nin Yurtdışına Doğrudan Yabancı Yatırımlarından Kanıtlar

Abstract

Artan jeopolitik gerilimler, doğrudan yabancı yatırım (DYY) örüntülerini giderek yeniden şekillendirmekte ve yatırımların jeopolitik olarak uyumlu ülkelere yönlendirilmesini ifade eden “dost ülkelere yönelim (friend-shoring)” eğilimini güçlendirmektedir. Bu konu son yıllarda giderek daha fazla ilgi görmesine rağmen, özellikle yükselen piyasa ekonomileri açısından DYY’nin jeopolitik belirleyicilerine ilişkin ampirik kanıtlar hâlen sınırlıdır. Bu çalışma, jeopolitik uyumun Türkiye’nin yurt dışına doğrudan yabancı yatırımları (YDYY) üzerindeki etkisini 2003–2023 dönemi için incelemektedir. Panel veri yöntemi ve Birleşmiş Milletler (BM) oylama benzerliğine dayalı bir jeopolitik uzaklık göstergesi kullanılarak elde edilen bulgular, jeopolitik uzaklık arttıkça Türkiye’nin YDYY akımlarının azaldığını ve bunun dost ülkelere yönelim davranışına güçlü kanıt sunduğunu göstermektedir. Ancak bu etki homojen değildir. Etki, yükselen piyasalarda daha güçlü ortaya çıkmakta; buna karşılık daha iyi yönetişim, özellikle yolsuzluğun kontrolü ile ifade özgürlüğü ve hesap verebilirlik mekanizmalarının güçlenmesi sayesinde zayıflayabilmektedir. Ayrıca çalışma, jeopolitik uyumun birden fazla kanal üzerinden işlediğini göstermektedir. Türkiye’nin YDYY akımları yalnızca ikili jeopolitik uyumun derecesine değil, aynı zamanda ülkelerin ABD–Çin rekabetindeki konumlarına ve blok aidiyetlerine de tepki vermektedir. Son olarak, jeopolitik uyumun etkisinin 2018 sonrası dönemde zayıfladığı bulgusu, jeopolitik ile YDYY arasındaki ilişkinin zaman içinde jeopolitik dinamiklerle birlikte evrildiğine işaret etmektedir.

Keywords

• Yurtdışına Doğrudan Yabancı Yatırım
• Dost Ülkelere Yönelim
• Jeopolitik Uyum
• Kurumsal Kalite
• Yükselen Piyasa Ekonomileri

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