FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN TURKEY

Year 2019, Volume: 24 Issue: 4, 1181 - 1194, 30.10.2019

Marwa Benghoul Halil İbrahim Aydın

Abstract

Foreign Direct Investment (FDI) has been considered as an important active driver of the economic growth for the host country, notably for the emerging ones. Although large research studies have investigated the determinants of FDI, governance indicators still not highly covered as some experts considered that quantifying such factors is not evident. This paper consists in examining the relationship between the economic growth and FDI in Turkey (1984-2017) with including aggregate variables that present two pillars of Governance Indicators: ‘control of corruption’ and ‘rule of law’. The results showed that the FDI is not crucial for the economic growth in Turkey, there is a positive relationship but there is no causality between FDI and the Turkish economic growth. Also, control of corruption and rule of law don’t have significant impact on the growth in Turkey

Keywords

Foreign Direct Investment, Economic Growth, Granger Causality, VAR Model

TÜRKİYE’DE DOĞRUDAN YABANCI YATIRIM VE EKONOMİK BÜYÜME

Abstract

Doğrudan Yabancı Yatırım (DYY), başta gelişmekte olan ülkeler olmak üzere, ev sahibi ülke için ekonomik büyümenin önemli bir aktif itici gücü olarak kabul edilmektedir. Çoğu araştırma, doğrudan yabancı yatırımların göstergelerini incelemiş olsa da, bazı faktörlerin belirlenmesinin açık olmadığı kanaatine varılan yönetişim göstergeleri hala yüksek oranda ele alınmamıştır. Bu makale, Türkiye'deki ekonomik büyüme ile DYY arasındaki ilişkiyi inceleyerek (1984-2017), Yönetişim Göstergelerinin iki ayağını temsil eden ‘yolsuzluğun kontrolü’ ve ‘hukukun rolü’ değişkenlerini dahil etmeyi amaçlamaktadır. Sonuçlar, DYY'nin Türkiye'deki ekonomik büyüme için çok önemli olmadığını göstermektedir. Ancak DYY ile Türkiye’deki ekonomik büyüme arasında bir nedensellik yoktur. Ayrıca yolsuzluğun kontrolü ve hukukun rolü değişkenleri de Türkiye’deki ekonomik büyüme üzerinde önemli bir etkiye sahip değildir.

Keywords

Doğrudan Yabancı Yatırım, Ekonomik Büyüme, Nedensellik, VAR Modeli

References

• AJMI, A.N., EL-MONTASSER, G. and NGUYEN, D.K. (2013). Testing the relationships between energy consumption and income in G7 countries with nonlinear causality tests. Economic Modelling, 35, 126-133.
• ALMFRAJIA, M.A. and ALMSAFIR, M.K. (2013). Foreign Direct Investment and Economic Growth Literature Review from 1994 to 2012. Procedia - Social and Behavioral Sciences, 129, 206 – 213.
• AMAL, M., TOMIO, B. and RABOCH, H. (2010). Determinants of foreign direct investment in Latin America. Journal of Globalization. Competitiveness and Governability, 4(3), 116-133.
• AYAYDIN, H. (2010). Doğrudan Yabancı Yatırımlar ile Ekonomik Büyüme Arasındaki İlişkinin İncelenmesi: Türkiye Örneği, Dumlupınar University Journal of Social Sciences, 26(1), 133-145.
• BJØRNLAND, H. C. (2000). VAR Models in Macroeconomic, Research. Statistics Norway Research Department.
• BOSWORTH, B. and COLLINS, S. M. (1999). Capital Inflows, Investment and Growth, Tokyo Club Papers, 12, 35-74.
• CARKOVIC, M. and LEVINE, R. (2002). Does Foreign Direct Investment Accelerate Growth? Financial Globalization: A Blessing or a Curse, World Bank Conference.
• CHANG, H.J. (2004). Regulation of Foreign Investment in Historical Perspective. The European Journal of Development Research, 16(3), Autumn 2004, 687–715.
• CHOE, J. (2003). Do Foreign Direct Investment and Gross Domestic Investment Promote Economic Growth? Review of Development Economics, 7(1), 44–57.
• CHOWDHARY, R. and KUSHWAHA, V. (2013). Domestic Investment, Foreign Direct Investment and Economic Growth in India since Economic Reforms. Journal of Transformative Entrepreneurship, 1(2), 74-82.
• DE MELLO, L. R. (1999). Foreign direct investment-led growth: evidence from time series and panel data. Oxford Economic Papers, 51(1), 133–151.
• DICKEY, D. and FULLER, W.A. (1981). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica, 49, 1057-1072.
• DING, M., Y. Chen and BESSLER, S.L. (2006), Granger Causality: basic Theory and Application to Neuroscience, B. Schelter, M. Winterhalder and J. Timmer (eds.) Handbook of Time Series Analysis. Wiley, 437-460.
• DURHAM, J.B. (2004). Absorptive capacity and the effects of foreign direct investment and equity foreign portfolio investment on economic growth. European Economic Review, 48(2), 285-306.
• FARRELL, R. (2008). Japanese Investment in the World Economy: A Study of Strategic Themes in the Internationalisation of Japanese Industry. Britain: Edward Elgar.
• FRECKLETON, M., WRIGHT, A. and CRAIGWELL, R. (2012). Journal of Economic Studies, 39(6), 639-652.
• GRANGER, C.W.J. (1969). Investigating Causal Relations by Econometric Models and Cross-spectral Methods. Econometrica, 37(3), 424-438.
• GRANGER, C.W.J. and LIN, J.L. (1995). Causality in the Long Run. Econometric Theory, 11(3), 530-536.
• HENDRY, D. F. (1995). Econometrics and Business Cycle Empirics. Foreign Direct Investment And Economic Growth In Turkey Economic Journal (London), 105(433), 1622.
• HENDRY, D.F. and DOORNIK. J.A. (1997). The Implications for Econometric Modelling of Forecast Failure. Scottish Journal of Political Economy.
• HIRST, P. and THOMPSON, G. (1994). Globalization, Foreign Direct Investment and International Economic Governance. Sage Journal, 1(2).
• IMF. (2003), The International Monetary Fund (IMF), Retrieved from https://www.imf.org
• KAHVECI, Ş. and TERZI, H. (2017), Causality Analysis of the Relationship between Foreign Direct Investment and Economic Growth in Turkey. Erciyes University Journal of Economics and Administrative Sciences, 49, 135-154.
• KATIRCIOGLU, S. (2009). Foreign Direct Investment and Economic Growth in Turkey: An Empirical Investigation by The Bounds Test For Co-Integration And Causality Tests. Original scientific paper Izvorni znanstveni rad., 1(560).
• KHAWAR, M. (2005). Foreign Direct Investment and Economic Growth: A Cross-Country Analysis. Global Economy Journal, 5(1), 1-11.
• KRATSCHELL, k. and SCHMIDTH, T. (2012). Long-Run Trends or Short-Run Fluctuations: What Establishes the Correlation Between Oil and Food Prices? SSRN Electronic Journal, 357.
• KUMAR, N. and PRADHAN, P. (2002). Foreign Direct Investment, Externalities and Economic Growth in Developing Countries. RIS Discussion Papers, 1, 1-37.
• LE, M. V. and SURUGA, T. (2005). Foreign direct investment, public expenditure and economic growth: the empirical evidence for the period 1970-2001. Applied Economics Letters, 12, 45 – 49.
• LEMMENS, A., CROUX, C. and DEKIMPE, M.G. (2008). Measuring and testing Granger-causality over the spectrum: an application to European production expectation surveys, 24, 414-431.
• LENSINK, R. and MORRISSEY, O. (2006). Foreign Direct Investment: Flows, Volatility, and the Impact on Growth. Review of International Economics, 14(3), 478-493.
• LI, X. and LIU, X. (2004). Foreign Direct Investment and Economic Growth: An Increasingly Endogenous Relationship. World Development, 33(3), 393-407.
• MCKELLAR, R. (2010). A Short Guide to Political Risk. Gower Publishing Limited, England.
• OSABUTEY, E.L.C. and OKORO, C. (2015). Political Risk and Foreign Direct Investment in Africa: The Case of the Nigerian Telecommunications Industry. Thunderbird International Business Review, 57(6), 441-456.
• OZER, M. and KAMISLI, M. (2015). Frequency Domain Causality Analysis of Interactions between Financial Markets of Turkey. International Business Research, 9(1), 176-186.
• PATNAIK, P. (1999). The real face of financial liberalisation. India's National Magazine. 16(4). National Seminar on financial liberalisation organised in Ernakulam on January 19, 1999 by the Bank Employees Federation of India (BEFI).
• ROMER, P. (1993). Idea gaps and object gaps in economic development. Journal of Monetary Economics, 32(3), 543-573.
• ROY, A.G. and VON DEN BERG, H.F. (2006). Foreign Direct Investment and Economic Growth: A Time-Series Approach. Global Economy Journal, 6,1-19.
• SARKAR, P. (2007). Does Foreign Direct Investment Promote Growth? Panel Data and Time Series Evidence from Less Developing Countries, 1970-2002. MPRA Paper No: 5176.
• SIMS, A.C. (1980). Macroeconomics and Reality. Econometrica, 48(1), 1-48.
• SOLOMON, E. (2011). Foreign Direct Investment, Host Country Factors and Economic Growth. Ensayos Revista de Economía, 33(1).
• VIJAYAKUMAR, N., SRIDHARAN, P. and RAO, K.C.S. (2010). Determinants of FDI in BRICS Countries: A panel analysis. Int. Journal of Business Science and Applied Management, 5(3).
• WORLD BANK. Retrieved from http://data.worldbank.org/indicator. (last Accessed 2018).
• YALMAN, İ. N. and KOŞAROĞLU Ş. M., (2017). Effect on Direct Foreign Investments on Economic Growth and Unemployment. International Journal of Economics, Business and Politics, 1(2), 191-205.
• YILMAZ, Ö., KAYA, V. and AKINCI, M. (2011). Impact on Economic Growth and Foreign Direct Investment in Turkey (1980-2008). Atatürk University Journal of Economics and Administrative Sciences, 25 (4), 13-30.
• ZEKARIAS, S. M. (2016). The Impact of Foreign Direct Investment (FDI) on Economic Growth in Eastern Africa: Evidence from Panel Data Analysis. Applied Economics and Finance, 3(1), 145-160.