The effect of trade openness and foreign direct investment on labor productivity (the case of Turkey 1970 - 2000)

In general, productivity which indicates the relationship between inputs and outputs, expresses the most efficiently usage of these inputs. In recent years, increasing interest on productivity, especially seeks the answer of what are the factors that affects productivity. Several studies carried out for this purpose. In this respect, the aim of this study is to bring out the affects of foreign direct investment and trade openness on productivity. In the first chapter of this study, a general definition of productivity is given and then various measurement methods of productivity is mentioned. In the second chapter, some general informations about foreign direct investment and trade openness is given and then earlier studies that researches the relationship between foreign direct investment and productivity and trade openness and productivity is mentioned. In the third and also the last chapter of this study, at first, relationship between productivity and trade openness is investigated by cointegration analysis for 31 observations between 1970 and 2000 years in Turkey. And then the relationship betweeen productivity and foreign direct investment is investigated by the same method. Thus, a long run relationship between productivity and both foreign direct investment and trade openness is determined.