Foreign Direct Investment Operations of International Businesses and Their Impact in Turkey

Abstract

The Republic of Turkey is located at the crossroads of many trade and investment routes, converging East with the West and North with the South. However, Turkey is not self-sufficient with respect to capital formation. As a result, it wishes to obtain the deficient part of the capital stock from foreign sources, mainly from foreign direct investment (FDI). The purpose of this paper is to examine the FDI inflows to the Turkish Republic and its effect on economic growth by employing the augmented Dickey-Fuller test, Phillips-Perron, Kwiatkowski, Phillips, Schmidt, Shin unit root tests, and least squares method. The results indicate that FDI inflows to Turkey bring about economic growth.