The factors that affect on foreign direct investments in Turkey (sectoral comparisons)

Abstract

This study focused on the concept of foreign direct investment (FDI) and examined economic, political, and investment climate-related factors influential on foreign direct investment decisions. To this end, what could be done to increase foreign direct investments on a sectorial basis was investigated through examining the factors influential on foreign direct investments in general and on a sectorial basis. In this context, analyses were made by using the annual data from the 1995 to 2012 period. The variables thought to be capable of influencing foreign direct investments in general and/or on a sectorial basis were classified, thereby creating 4 different regression models. Based on the regression analyses made, it can be said that not the same economic effects prevail in the sectors receiving foreign direct investment in Turkey, and political stability is influential on foreign direct investment, contrary to expectations.

Keywords

• Unit Root
• Sectoral Foreign Direct Investments
• Economic and Political Factors