Determinants of foreign direct investments and effects on the economic growth in Turkey

When considering the benefits of FDI-consitute a large portion of international capital movement and provide a great benefit to economic growth to the country's economy in the point of employment, technology, business knowledge, integration to the international markets and the creation of a competitive environment- to the national economy, and the importance of these investments in the country's economy, determination of economic factors in the choice of the national economy of FDI is great importance in order to ensure continuity of inflow of FDI. On the purpose of identifying the determinants of FDI, regression analysis is performed by using time series data belonging to period 2005Q1-2015Q3 of openness rate, exchange rates, gross domestic product, international net reserves, interest rates, BIST and country risk variables selected from Turkey's economy. Also, Granger causality test is applied between FDI and gross domestic product variables that represent the economic growth. At the end of the study, it is identified that the determinants of FDI are openness rate, exchange rates, gross domestic product and international net reserves variables and that there exists bidirectional causality between FDI and gross domestic product.