The effect of foreign direct investments on economic growthin Turkey,an econometric analysis

The developments in telecommunication and transportation technology, which have evolved with increasing globalization, have played an effective role in accelerating the circulation of international trade in goods and services. In addition, countries have adopted open trade and financial policies in order to comply with international trade standards to access foreign capital. These developments have driven more economic integration between countries. FDI rates have sped up since the 1980s, especially with the liberalization process, and have become one of the main international capital movements for open economic regimes. FDIs not only provide capital flows to the hosted countries but also increase their competitiveness which boosts economic growth and development. FDIs transfer technology to the hosted countries which increases the efficiency of human capital and domestic investments. besides, FDIs also increase the general welfare level with regards to the following aspects; it has a positive effect on sustainable economic growth, and it has especially vital for developing countries with limited national savings and insufficient capital accumulation. In this study, the causality relationship between foreign direct investments and economic growth in the 1980-2020 period has been investigated. The Toda-Yamamoto causality test was utilized after we discover that the series is not stationary at the same level using the unit root tests. The results show a causality relationship running from foreign direct investment to economic growth.