Impact of Foreign Direct Investment, Financial Development and Stock Market on Economic Growth: The Case of Turkey

The purpose of this study is to investigate the relationship between foreign direct investment, financial development and stock market towards economic growth in Turkey. Various tests are applied in order to indicate the connection in between , Johansen co-integration test made on non-stationary variables indicate that there is a co-integrating vector as well as there might be a long term relationship among foreign direct investment, financial development, stock market and the dependent variable GDP concerning error correction model estimation. It is found that there is a long run equilibrium relationship among the variables. In long term, foreign direct investment and financial development are statistically significant at α=0.10.Which means that foreign direct investment and financial development have a positive impact on gross domestic product. Moreover, SM has a negative impact on GDP in Turkey for the long run.