The Impact of Foreign Direct Investment on Trade (Export and Import) in Turkey

Mehman Karimov
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Mehman Karimov: Ph.D., Kaposvár University, Faculty of Economic Science
Authors registered in the RePEc Author Service: Leida Ruvina

European Journal of Interdisciplinary Studies Articles, 2020, vol. 6

Abstract: It is said that after globalization processes foreign direct investment start to influence trade moreover it is very complicated to deduce the relationship between trade and FDI according to theoretical analysis. Therefore, empirical studies showed that until the 1980s international trade generated direct investment but after 1980s FDI started to heavily influencing international trade. Also, results showed that the relationship can differ from one country to another. Thus, this paper is aimed to analyze the impact of Foreign Direct Investment inflow on the macroeconomic variable as a Trade (Export, Import) in Turkey. The paper covers the time period from 1974 to 2017. The time series datasets, those are obtained from World Bank and IMF database are utilized in employed statistical models as ADF Unit Root, VAR lag selection, Johansen co-integration, and the Granger Causality tests, to fulfill empirical part of the paper. Based on results, it was confirmed that there was the presence of the co-integration between analyzed series. Additionally, results of Granger causality test showed that there is unidirectional causality from Export and Import to FDI.

Keywords: FDI; Export; Import; Turkey; ADF test; Johansen co-integration test; VAR; Granger causality test. (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eur:ejisjr:235

DOI: 10.26417/ejis.v5i1.p6-17

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