Direct foreign investment, employment and gross national product relations: A survey on Turkey

When the nations are making economic decisions they need to proceed close relationships with each other because of the recent developments in the world economics, particularly the globalization process. An independent decision taken by anyone of the countries may affect the other countries in this globalized world. These effects appear along with recently rising international capital movements. In the study, the expectation of positive relationship between direct foreign investment and employment has been tested econometrically with current data. Turkey's The Granger causality across direct foreign investment, employment and gross national product between the years 1974 and 2013 has been tested. Next, the relations of direct foreign investment-employment, direct foreign investment-gross national product, and gross national product-employment are evaluated from technical and empirical aspects. Examined concepts have been analyzed diagrammatically on yearly basis. It has been concluded that direct foreign investment which is supposed to have positive effect on employment does not have meaningful causality relation in Turkey. The reasons of this result have been tried to be explained. Granger causality test results have been included plainly because regression analysis which measures the force of the relation cannot be done for the concepts having meaningless relations.