Exploring the Relation Between Sectoral Foreign Direct Investment and Domestic Investment: Case for Turkey

Author

Selin Erkan, CUNY City CollegeFollow

Date of Award

2018

Document Type

Thesis

Department

Economics and Business

First Advisor

Kevin Foster

Second Advisor

John Schmitz

Keywords

FDI, Turkey, Economics

Abstract

This thesis investigates the relationship between Foreign Direct Investment (FDI) and domestic investment in Turkey during 2005Q1-2016Q2 to see if there is a crowding-in or crowding-out relationship. Sectoral FDI data for manufacturing, agriculture and service are employed and gross fixed capital formation is used as a proxy for domestic investment. GDP and export are used as control variables. A VAR model estimates negative coefficients of sectoral FDI on domestic investment indicating that there is some crowding-out in Turkey during 2005Q1-2016Q2 although not one-for-one. These negative effects are concentrated in the manufacturing sector.

Recommended Citation

Erkan, Selin, "Exploring the Relation Between Sectoral Foreign Direct Investment and Domestic Investment: Case for Turkey" (2018). CUNY Academic Works.
https://academicworks.cuny.edu/cc_etds_theses/756