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Asl balk stili iin tklatn,Asl metin stillerini dzenlemek iin tklatn,İkinci dzey,nc dzey,Drdnc dzey,Beinci dzey,*,THE CAUSALITY RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FOREIGN DIRECT INVESTMENT IN TURKEY,Assoc.Prof.Dr.Muharrem AFAR,ANADOLU NİVERSİTESİ,BUSINESS,&,ECONOMICS SOCIETY INTERNATIONAL,2007 CONFERENCE FRENCH RIVIERA-ANTIBES,FRANCE,July 16-20,2007,The aim of this study,Increasing trend towards globalization in the last three decades has led to the emergence of intense discussions on some possible effects of,FDI,on economies.,Some of these discussions focus on the effects of,FDI,on economic growth,The aim of this study is to explore the causality relationship between Foreign Direct Investment and economic growth in Turkey,Granger causality analysis was used in order to test the hypotheses about the presence of causality between Foreign Direct Investment and economic growth,İmportance of FDI in Economy,F,oreign capital investments are generally classified into two groups in the literature,Foreign Direct Investment(FDI),and,Foreign Portfolio Investment(FPI),İmportance of FDI in Economy,Although,FDI,and,FPI,are similar in general,there are some important distinctions between them,Portfolio investments are made by capital owners on securities,stocks and shares in another country in order to gain interest income and profit.,Foreign Direct Investment occurs as the transfer of,investable,resources to other countries by individuals and companies.,the higher amount of foreign investment a country can attract,the bigger portion it can take from global production and income,therefore;its national wealth can increase,FDI in TURKEY,As of 1950s,Turkey has officially opened its doors to foreign capital,Until 1980,the total foreign investment in Turkey was even less than 250 million$,Foreign capital was encouraged thanks to the measures taken for economic stability in 1980 and the regulations such as“Foreign Capital Framework Decree.,There has been considerable increase in foreign capital investments from this date on,the average amount of FDI in Turkey per year between 1992 and 1997 reached to 700 million$.,FDI in TURKEY,There was a similar tendency in between 1998-2003,.,2001 was a special year for foreign capital inflow when Foreign Direct Investment reached the highest level of all times,(,3.2 billion$),there was a considerable decrease in foreign direct investments in 2002 and 2003(1 billion$in 2002 and about 500 million$in 2003).,FDI in TURKEY,As of 2003,foreign capital can be said to have an enormous growth.,According to the BP,S,published by Central Bank of Republic of Turkey,2.847 million$foreign investment in 2004,9.650 million$in 2005,For 2006,this number is predicted to be approximately 12.500 million$(not officially declared yet).,LITERATURE ON FDI AND GROWTH,As a result,the complex relationship between,FDI,and economic growth resulted in a large number of empirical studies in developed and developing countries.,When the theoretical aspects related to the relationship between,FDI,and growth is examined,it can be seen that there are different ideas regarding such causality.,LITERATURE ON FDI AND GROWTH,As a result,the complex relationship between,FDI,and economic growth resulted in a large number of empirical studies in developed and developing countries.,When the theoretical aspects related to the relationship between,FDI,and growth is examined,it can be seen that there are different ideas regarding such causality.,LITERATURE ON FDI AND GROWTH,As a result,the complex relationship between,FDI,and economic growth resulted in a large number of empirical studies in developed and developing countries.,When the theoretical aspects related to the relationship between,FDI,and growth is examined,it can be seen that there are different ideas regarding such causality.,LITERATURE ON FDI AND GROWTH,Borenzstein et al.(1998)has made a regression analysis which includes 69 developing countries and the data covering 1970-1979 fiscal years.,The study,shows that technological development is very important for the economic growth of developing countries and,FDI,affects economic growth positively,LITERATURE ON FDI AND GROWTH,Ericsson and Irandoust calculated the cause and effect relationships between FDI and economic growth,for,Denmark,Finland,Norway and Sweden in 2001.,The researchers failed to find a causality relationship for Denmark and Finland and,LITERATURE ON FDI AND GROWTH,Chakraborty and Basu(2002)conducted a study in which they calculated the causality between FDI and growth in Indian,The results of the study,which is based on annual data between 1974 and 1996 fiscal years,showed the presence of causality from FDI to GDP rather than from GDP to FDI,LITERATURE ON FDI AND GROWTH,Liu,Burridge,and Sinclair,in 2002,predicted a relationship between FDI,trade and the economic growth in China.By using the data for 1981-1997 fiscal years,they found a two-way relationship between FDI,economic growth and import.,LITERATURE ON
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