Macroeconomic effets of foreign direct investments - Turkey case

The global integration activities of financial markets has been increased significantly in the late 1980s and 1990s. The basic factor lying under this process was the opportunity of risk diversification at international level and the rise in globalization of investments seeking higher yields. Countries wanted to gain from this atmosphere as much as they could by realizing market-oriented reforms within this context of removing obstacles on investment shares.Following this process, the center of the debates has been questioning of the contribution of FDI into the country.It is observed that when we take a look at the historical development process of the FDI started to rise in 1980s has reached the high-level amounts in 2000s with the participation of transition economies especially in 1990s.The devopment of FDI has also examined worldwide in the sector-specific and It is observed that It has basically grown in three sectors. These are primary product, manufacturing industry and services sector.The aim of the study is to examine the historical development stage of FDI and to search the impact of the basic macroeconomics variables.After examining the definition and components of the international capital movements in the study, the development process of FDI has examined throughout the world. Later, FDI is undertaken by sectoral-base and the sectors, on which has concentration, has been determined. At the last part of the study, particularly in Turkey, the historical development process of FDI, the sectors on which It has concentration and the Its contribution to Turkey has been questioned.The way FDI come to Turkey and the sectoral distribution of these investments are examined detail in the study where researches about this subjects are given place as well. In the study, changes in some of the basic macroeconomic variables are compared with incoming FDI and the inferances related to issue has been made.In conclusion, It is observed that Turkey could not benefit sufficiently from FDI and attracted foreign capital below her potential. In this context, It is stated that incoming FDI had high contribution to export, whereas It has had limited contribution to balance of payment, growth and employment.