The role of foreign direct investment in Turkish economy

The aim of the study is to discuss the importance of mode of international market entries and to understand the role of Foreign Direct Investment (FDI) in the Turkish economy from the international business perspective. In this study, the importance and determinants of FDI and the factors that affect incoming FDI flows are analyzed. For empirical evaluation, Ordinary Least Square technique is used over the time duration 1988-2018. In the study growth, rate of FDI is used as dependent variable, while other factors used as variables that affect FDI inflows. Our results represent that economic growth and growth rate of foreign trade positively associated with the growth rate of FDI in Turkey although the results are insignificant because of data limitations. Growth rate of exchange rate and labor force participation rate are negative and insignificant while technology has negatively affect the growth rate of FDI in Turkey. This research aims to enrich the knowledge on this field by analyzing and discussing some aspects of the topic by compiling statistics and data and knowledge through the access to previous theoretical researches and literature. According to the rising developments and progress in Turkish economy, policy makers in their external strategies should include FDI as an important factor in determining growth. Globalization of Turkey must be enhanced by forming strategies of attracting additional appropriate quantity of FDI to attain the positive influence of FDI on productivity and exports. Keywords: Foreign direct investment, international business, economic growth, foreign trade, ordinary least square technique.