A survey on international capital flows, trade and growth

The purpose of this study is investigating the direct capital flows as a part of international capital flows from the perspective of the international capital flows, trade and economic growth and examining the causality relationship between international trade and economic growth of Turkey. In this respect, at the first chapter of this study, the concept of international capital flows, it's types and theories and the strategies that are formed for this are discussed. In the second part of this study, the concepts of international trade and their relationship with the economic growth and economic development are investigated. In the last section, an economic analysis was carried out with the yearly data covering the years 1990- 2016. Stability and unit root analyzes of time series were analyzed by Augmented Dickey- Fuller (ADF) and Phillips-Perron (PP) unit root tests within the framework of the established linear regression model. In order to investigate the existence and direction of causality relationship between the data used, Granger causality test was applied. To determine the long- term effects of the time series data, Johansen cointegration test was conducted and vector error correction model results were obtained with respect to Johansen cointegration test results. The effects of capital flows and countries free trade openness on Gross Domestic Product per Capita was presented at the results part of the study. Among the capital flows, capital inflows to the country as expected as a result of this study affects the GDP growth positively and capital outflows negatively. In addition, due to the higher volume of the imports in Turkey, the free trade openness variable shows adverse effect on the economic growth of Turkey.