THE IMPACT OF FOREIGN DIRECT INVESTMENT ON TURKISH ECONOMY 2010-2016
Tis study focuses on Foreign Direct Investment (FDI) inﬂows and how they are linked with the economic indicators in Turkey including the Real Eﬀective Exchange Rate (REER), and Gross Domestic Product per capita of Purchasing Power Parity - GDP (PPP) in Turkey. Te GDP (PPP) variable is used because it shows signifcant causality on REER, along with the exchange rate volatility of the U.S Dollar in the Turkish stock market. Also, as an important sector of the Turkish economy, tourism revenue is elucidated according to the Organization for Economic Co-operation and Development (OECD) data from 2016.
Te main objective of this study is to evaluate the impact of the FDI investment on economic condition in Turkey for the period between January 2010 and July 2016. Te selected period is important because it represents the crucial time for Turkish economy following the 2008 global fnancial crisis along with the ongoing Civil War in neighboring Syria that had initiated in 2012, Turkish-Russian crises of 2015, and the military coup attempt in Turkey in 2016. It is argued that despite all the negative international and regional developments, FDI and Tourism play key roles in attracting income to the country. Tis is presented in the level of REER and GDP for PPP. Te results also support the fndings of many economists, who have previously asserted that the Turkish economic interaction is growing at a globalized level, and is able to compete with the other large attractive areas for foreign investors around the world. Finally, the results demonstrate that the tourism industry was the least aﬀected sector in Turkey.
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