ABSTRACT - Anadolu üniversitesi摘要：该üniversitesi.ppt

THE CAUSALITY RELATIONSHIP BETWEEN ECONOMIC GROWTH AND FOREIGN DIRECT INVESTMENT IN TURKEY Assoc.Prof.Dr. Muharrem AF?AR ANADOLU üN?VERS?TES? 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 ?mportance of FDI in Economy Foreign capital investments are generally classified into two groups in the literature Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) ?mportance 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