The relationship of foreign direct investments, R&D and economic growth: The case of Turkey

Foreign direct investments (FDI) and research and development (R&D) activities are considered among the main factors affecting economic growth. There are many studies in the literature on both FDI and R&D. A clear consensus has not been reached in these studies examining the growth relationship. The aim of this study is to investigate the relationship between FDI, R&D and economic growth in Turkey for the period 1996-2022 using the VAR analysis method. According to the findings obtained from the study, there is a two-way relationship between the variables of economic growth, and FDI inflows; economic growth, and R&D expenditures. In other words, according to the causality test findings; in Turkey, FDI inflows and R&D expenditures cause economic growth, while economic growth is the cause of both FDI inflows and R&D activities.