A Review of Foreign Direct Investments in Turkish Energy Sector

Abstract

Energy sector is one of the key sectors that can affect economic development and contribute to sustainable development goals. In addition, growing energy security concerns, maintaining low costs and improving efficiency warrant implementing various government policies and encouraging better coordination among different actors. It is in this context, foreign investments can play an important role in developing economies to address these issues. The literature on FDIs to other sectors is colossal and well documented; however, studies on energy sector have been limited and mostly carried out for the developed economies and major developing economies. In this paper, a contribution to the literature has been made by examining analyzing Turkish energy sector, which has promising prospects for the Middle East and South-Eastern European regions. The review shows that Turkey has taken steps to create a favorable environment for foreign investors; yet, it still struggles with structural economic problems and energy-market related issues. Moreover, European integration process has made significant contributions to Turkish economy. In this regard, macroeconomic stability and together with pursuit of economic and institutional reforms to complete accession negotiations for EU membership is critical to stimulate further investments into the energy sector.

Keywords

• Foreign Direct Investment,Energy,Turkey

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