Article

‘Locational Determinants of Foreign Direct Investment in an Emerging Market Economy: Evidence from Turkey’

Multinational Business Review 01/2002; 10(1).

ABSTRACT

Over the past two decades, Turkey has recorded a substantial increase in the level of annual foreign direct investment (FDI) inflows. Building on the prior literature, this paper provides an empirical analysis of location-related determinants of FDI. This is undertaken by means of a co- integration analysis of major locational factors impacting upon the level of FDI inflows for the period 1980-1998. The evidence from this study supports the contention that while Turkey offers several location advantages to foreign investors in terms of market size, infrastructure, openness of the economy and market attractiveness, the lack of exchange rate and economic stability has hindered its efforts to harbor much higher volume of FDI.

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    • "On the contrary, other researchers believed that FDI might bring a crowding effect on domestic investment, external vulnerability and dependence, destructive competition of foreign affiliates with domestic firms and a market-stealing effect as a result of poor absorptive capacity (Krstevska and Petrovska, 2012; Lipsey, 2004; Nourbakhshian et al., 2012). Nowadays, renewed research interest in FDI inflows stems from the change of perspectives among policy makers in host countries to encourage and attract more FDI that would create opportunities and help developing countries to achieve sustainable development (Cassidy and Callaghan, 2006; Erdal and Tatoglu, 2002). The various relationships between FDI inflow and its determinants have been studied comprehensively . "
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    ABSTRACT: This study aims to evaluate the long-run and short-run relationships among foreign direct investment (FDI) inflows and their determinants in Jordan for the (1978–2012) period. The bounds testing approach is used to analyze the long-run and short-run relationships among the variables. However, the Granger causality test is utilized to explore the directions of causality among the variables. The results identify that there are long-run and short-run relationships among FDI and its determinants. Moreover, the Granger causality test recommends a deferent causal relationship among FDI and their determinants. In general, the Jordanian policy makers have to be aware to the importance of inward FDI in the Jordanian economy.
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    • "Moreover, most studies have also emphasized the role of the infrastructure of a host countryin determining the amounts of FDI inflow. Erdal and Tataoglu (2002), Esiyok (2011) and Deichmann et al. (2003) have all suggested apositive relationship between a host country's improved infrastructure and FDI inflows. The labor cost also impactsthe volume of FDI inflowsto a host country. "

    Preview · Article · Jan 2015
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    • "FDI remains the biggest component of net resource flows to developing countries, and since 1990 it has been a growing part of total investment in these countries. The amount of FDI flowing to developing countries increased remarkably in the 1990s and now account for about 25% of global FDI (Erdal and Tatoglu, 2002). From only $15 billion in 1985 and $23.7 billion in 1990, FDI inflow to developing countries rose up to $162 billion in 2002 (Farrell, Remes, & Schulz, 2004) which is significant. "
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    ABSTRACT: This paper aims to investigate empirically the impact of FDI on economic growth for Azerbaijan, Kyrgyz Republic, Kazakhstan, Tajikistan, Turkmenistan, and Uzbekistan over the period 1997-2010. The Johansen cointegration and Granger causality tests are used in order to analyze the causal relationship between FDI and economic growth. It is crucial to see the directions of causality between two variables for the policy makers to encourage private sectors. The cointegration test results indicated that FDI and Economic Growth variables are cointegrated for Azerbaijan and Turkmenistan. By using Granger Causality test we found that FDI causes GDP for Azerbaijan and bidirectional causality is observed for Turkmenistan.
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