An assessment of foreign direct investments in turkey within the framework of developing countries: An empirical analysis.

Foreign direct investment is the most reliable and the most permanent one among all the external financing resources. The first examples of these kind of investments appeared in the early period of the 20th century however actual expansion of foreign direct investment raised after the end of Second World War. Beginning from the 1980s foreign direct investment has become the most important financing resource especially for the developing countries which have problems always in terms of lack of savings, unemployment, balance of payment deficits, and the provision of foreign technology. For these reasons, both developed and developing countries struggle to get the foreign direct investment to their own countries. In Turkey, foreign direct investment was put on the agenda in the early years of Turkish Republic in order to catch the targeted development level and to overcome the capital difficulties. However as a result of the 1929 Great Depression and the difficult conditions of the Second World War Turkey could not benefited from these investments in a sufficient way. After the Second World War, Turkey followed the wide-ranging trend of the world and made her own preference to bring the foreign direct investment. For this purpose, in 1954 one of the most liberal foreign direct investment laws of the world was enacted. But this law never brought enough investment to the country when compared with the leader countries of that field. The actual change happened in Turkey after 1980 since most economic policies liberalized. It is seemed that developed countries are the most favoured countries from foreign direct investment when we take into consideration the determinants and the host country effects of foreign direct investment. Additionally foreign direct investment is usually performed between the developed countries. Except last few years Turkey had never benefited from foreign direct investment and brought sufficient foreign direct investment as desired. But it is clear from this empirical analysis on the foreign direct investment in Turkey that foreign direct investment has more contribution to the economic growth of Turkey with respect to the other analyzed developing countries.