The effect of foreign direct investments on Turkey's export performance

With globalization, the whole world has become a common market. Capital movements have accelerated and technological developments have become increasingly widespread. In this process, foreign direct investments gained importance. Underdeveloped and developing countries have turned to foreign direct investments in order to increase capital mobility and develop the country's economy. The subject of this study is the effect of foreign direct investments on export performance in Turkey. The effect of foreign direct investments, which is among the determinants of exports in Turkey, on export performance has been tried to be measured. In this research, firstly, the concept of foreign direct investment, the determinants and types of FDI's, the theories developed on this subject and the historical development of foreign trade and foreign direct investment are explained. In addition, national and international literature on the effect of foreign direct investments on exports is reviewed, and the methods and results used in these studies are examined. In order to examine the effect of foreign direct investments on export performance, the relationship between export, foreign direct investment, import, real effective exchange rate and industrial production index variables in Turkey was examined by using monthly data for the period 2005/01-2021/09. For this purpose, ADF and PP unit root tests were applied to the data sets to measure the stationarity. ARDL Bounds Test was used to determine the cointegration relationship. In the analysis, it was found that the series were cointegrated. As a result of the empirical findings, it has been determined that the effect of foreign direct investments on Turkey's exports is statistically significant. Finally, the causality relationship between the variables was examined using the Granger causality test.