Determinants of foreign direct i̇nvestment of Turkey

One of the barriers that developing countries face when it comes to development is capital insufficiency and one way which developing countries can get finance and capital is a foreign direct investment (FDI). This study uses the quarterly data of 1998-2016 period to find the determinants of foreign direct investments in Turkey. To this aim firstly Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) unit root tests used to examine the stationary of the series, secondly, Johansen co-integration test, Granger causality test and VAR models implemented. In the empirical results, the study found that there is a positive relationship between the GDP, real effective exchange rate, interest rate, openness and foreign direct investments. On the other hand, the study found a negative relationship between foreign direct investment and consumer price index.