Analysis of the relationship between foreign direct investments and credit ratings of international credit rating agencies: The case of Turkey

The concept of credit rating, which has been mentioned in the world agenda with its popularity recently, plays an important role by being used by capital markets, banks, companies, municipalities and states. The size and efficiency of the transaction volume of the credit institutions in the world, whose name we frequently witness in our country, increases the importance of these institutions. Turkey, like other developing countries, seriously needs investments. For our country, which does not have sufficient savings rate, infrastructure, knowledge and technology, foreign direct capital has a very important place in the development of the country. In this study, the credit ratings of Standard and Poor's, Moody's and Fitch, which are among the three major rating agencies, for Turkey between 1992-2020 are discussed. These credit ratings were obtained from the websites and reports of credit rating agencies, and the amounts of direct investments were obtained from the archives of the Central Bank of the Republic of Turkey. Between 1992 and 2020, Turkey's credit ratings were given according to the 100-point system according to the Comparative Country Rating Index. In order to measure the relationship between credit ratings and foreign direct investment, correlation analysis was used to investigate the relationship between credit ratings and foreign direct investment in Turkey. Keywords: Credit Rating, Direct Investments, Comparative Country Rating Index