The analysis of foreign capital movements in the world ıt's ımpact on developed and developing countries and Turkey model

Foreign direct investment in world started with England?s colonial activities in seventeenth and eighteenth century and accelerated with Industrial Revolution. Mass production after Industrial Revolution has increased the requirement of big markets. Generally foreign direct investment has rising trend except world wars and financial crisis.In Turkey it can be said that first foreign direct investment followed by Balta Limanı Trade Agreement in 1838. From Republican period to 1980s there is no negative attitude to Foreign Direct Investments even if implemented policies does not reflect it. Since foreign direct investment areas were narrowed because of import substitution policies, protectionism policies, prohibition of imports, exchange controls, high duties. Turkey has not benefited enough from foreign indirect ivestment until 1980s.After 1980s foreign direct investments have been significantly increased both in Turkey and World as a result of globalization. Investment which were made by multinational companies is based on profit.Of course there are some risks to make profit. Countries prefer foreign direct investments rather than portfolio investments due to some risks of portfolio investments. Moreover foreign direct investments have benefit to host country such as creating competition, increase the capital stock, create employment, raise quality, contribute to GDP, transfering technology.