Contribution of foreign investments to economic growth: evalution for Turkey's economy

Foreign direct investment is seen as an important source of economic growth for any economy, and the Gross Domestic Product (GDP) plays an important role in the improvement of infrastructure-superstructure, employment opportunity, export and trade performance. Therefore, the aim of the thesis is to examine the contribution of foreign direct investment ın economic growth of Turkey. Secondary data was used in the thesis. The World Bank development indicators data of Turkey, TOBB 2017 economic report, Turkey 2018 OECD economic survey report, R. T. Central Bank 2018 international investment position report, R. T. Ministry of Industry and Technology foreign direct investment reports, R. T. Ministry of Commerce's data, R. T. Investment Support and Promotion Agency 2017 report, International Investors Association 2017 foreign direct investment report and UNCTAD world investment report 2018 is used to examine and discuss foreign direct investment in Turkey. Then, regression and ANOVA analysis was performed to determine the impact of foreign direct investment in Turkey's economic growth by using precise data obtained from the World Bank for period 1980-2015. According to the results of the impact-response analysis, although the GDP variable reacts positively to one-unit shock in capital formation and export variable, this response is only statistically significant for one period. Although capital formation and export variables do not show a statistically significant response to one-unit shock in foreign direct investments, capital formation, export and GDP variables show a positive and statistically significant period-significant response to one unit shock. At the 5% level of significance, there is a causal relationship from capital formation to direct foreign investment.