Effects Of Outward Foreign Direct Investment Of Turkey On Economic Growth And Domestic Investent

The main purpose of the present study is to analyse the effects of foreign direct investment of Turkey on economic growth and domestic investment. Outside direct investments, growth, domestic investment, domestic savings and export rates between 1980 and 2011 are used as variables in this study. There are not many studies on the effects of direct investment by a country to foreign countries on the investing country’s economic growth. Therefore, as far as we know, this study is the first empirical study for Turkey.Unit-root test was applied on each variable, and bound test approach was adopted for testing cointegration according to the results of the tests. Finally, short-and-long-run relationships of variables were analysed using ARDL approach. Empirical results show that outward foreign direct investment from Turkey positively affect economic growth of Turkey, however, it does not have any short-run effects on growth while having favourable effects on investments in both short-and-long-runs.