Examination of the relationship between foreign direct investments and economic growth: The case of Turkey

With the influence of globalization, the need for foreign direct investments in order to maintain economic growth over time is increasing. Foreign Direct Investments (DYM) have an impact on the economic growth and development processes of countries through channels such as capital formation, technology, management knowledge, trade and competitiveness. Therefore, DYMs are an important tool in eliminating the deficiencies of the main economic problems experienced in developing countries such as Turkey. In this respect, it has become important to determine the direction of foreign direct investments in Turkey on the economic growth of Turkey. The study analyzes the relationship between direct foreign investments and economic growth covering the years 1990-2020 in Turkey. In the analysis, short and long -term relationships between GDP, foreign direct investment, gross fixed capital formation and inflation variables are discussed. In line with these explanations, it is seen that as a result of empirical findings obtained from expanded Dickey Fuller and Philips Perron unit root jugs, it is seen that the variables are not stable in the level values of the variables, but they become stable in the first differences. According to the results of the ARDL boundary test, it was found that these variables are integrated in Turkey, and more clearly, the variables move together in the long term. In addition, it was concluded that there is a positive relationship on GDY and BSSO variables in the short term and DYM and BSSO variables in the long term.