The effects of investment incentives on international trade and foreign direct investments

Government incentives have an important place in terms of the policies implemented in the development and development stages of the country's economies, the fair distribution of public resources and their spreading to the base. One of the most important factors of economic development is the direct investments made in the country. Foreign direct investments, together with the changing global economic structures, have had an impact especially on the economies of developing countries. Developing countries have tended to seek solutions by inviting foreign investments to their country's economies. As a result of this orientation, international direct investments accelerated the development of the economies of developing countries. Turkey has a comprehensive investment incentive program for foreign direct investments. It is also aimed to increase the incentive programs in order to attract and integrate foreign direct investments into the country's economy and to ensure competitiveness in the international economic system. In this study, it is analyzed whether investment incentive policies have an increasing effect on international trade and foreign direct investments. In this direction, the time series model was established by using the data generated in quarterly periods between 2001-2021 on the number of investment incentive files in Turkey, export figures and foreign direct investment figures. As a result of the structural break unit root test in the created model, it has been seen that foreign direct investments, known for their trajectory towards a reliable country, are affected by structural transformations in Turkey as well as shocks such as the global epidemic. In the cointegration test, it is seen that there is a long-term relationship between foreign direct investments and exports. It has been revealed that there is a relationship that can encourage foreign direct investments to Turkey through economic growth and investment incentives supported by exports.