Foreign Direct Investments'Effects on the Balance of Current Account: Cointegration Analysis with Multiple Structural Breaks in Turkey, China and India Sample

Ismet Gocer and Osman Peker

Journal of BRSA Banking and Financial Markets, 2014, vol. 8, issue 1, 87-116

Abstract: In this study the effects of Foreign Direct Investment (FDI) on current account deficit were analyzed with multiple structural breaks unit root test of Carrion-i-Silvestre et al. (2009), multiple structural breaks cointegration test of Maki (2012) and dynamic ordinary smallest square method for Turkey, China and India by using 1980-2011 period data. According to the empirical findings; 10% increase of FDI leads to an decrease on the current account deficit in Turkey by 3%, India by 4.1%; on the contrary, it has been determined an increase on the current account surplus in China by 3.8%

Keywords: Foreign Direct Investment; Balance of Current Account; Cointegration Analysis with Multiple Structural Breaks (search for similar items in EconPapers)
JEL-codes: F21 F32 O24 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:bdd:journl:v:8:y:2014:i:1:p:87-116

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