Turkish economy experienced a steady growth under a single party administration for the period of 2002 and 2019. An attractive geographical location, a young population, easing of trade barriers, an export lead growth strategy, and political stability attracted large sums of foreign direct investment (FDI) to Turkey during this period. FDI both complements the domestic private investments and makes a rapid technology transfer possible and, hence, stimulates economic development further. This paper aims at exploring impact the FDI and trade openness on the Turkish economy. This study uses the Autoregressive Distributed Lag (ARDL) method to investigate the relationship among real GDP and employment, capital formation, FDI, and trade openness. ARDL analysis results show some evidence of a positive and statistically meaningful effect of employment, FDI, and trade openness on the economic development in Turkey. These results confirm that employment, FDI and trade openness are key factors in economic growth and development for Turkey. Therefore, Turkey should reduce barriers to trade and encourage inflow of FDI in order to finance economic growth and keep up with the technological advancements.
Primary Language | English |
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Subjects | Business Administration |
Journal Section | Research Article |
Authors | |
Publication Date | June 22, 2020 |
Published in Issue | Year 2020 Volume: 7 Issue: 1 |
Pamukkale Journal of Business and Information Management