FOREIGN DIRECT INVESTMENTS AND ECONOMİC GROWTH: HOW WELL DOES THE TECHNOLOGY CHANNEL WORK IN TURKEY?

Yıl 2016, Cilt: 4 Sayı: 4, 20 - 38, 14.05.2017

Yusuf Bayraktutan , Meltem Tarı Özgür

https://doi.org/10.18825/iremjournal.271040

Öz

The interaction between foreign direct investments
(FDI) and economic growth is one of the frequently discussed issues in the literature,
both theoretically and empirically. The role of different channels through
which FDI promotes economic growth is an aspect that should be focused on. The
main purpose of this study is to assess the impact of the technology spillovers
as a driving force for economic growth of Turkey in terms of manufacturing
industry using the data of 1988-2012 period. For this aim, the dynamic
interactions between export of the manufacturing industry (EXP) as a measure of
technology spillover, gross domestic product (GDP), gross fixed capital
formation (GFCF) and FDI in manufacturing industry were investigated via
cointegration and causality tests in addition to the innovation accounting
techniques in the vector autoregressive (VAR) framework. While the
cointegration test yields no clear evidence of long-run equilibrium
relationship among these variables. Granger causality test indicates that there
is a univariate causality running from the EXP to the all other variables, and
FDI is not Granger cause for the other variables. Nevertheless, the positive
impact of FDI on the GDP and EXP variables is observed within the results of
the innovation accounting analysis. From this point of view, it is concluded
that the FDI leads economic growth more significantly in indirect ways rather
than through direct ways. Under the light of these empirical outcomes, proposing
policies based on strategies which encourage FDI inflows to the sub-sectors of
manufacturing industry with higher technological gaps seem as effective and
valuable in terms of promoting economic growth.

Anahtar Kelimeler

Foreign direct investment, economic growth, manufacturing industry

FOREIGN DIRECT INVESTMENTS AND ECONOMİC GROWTH: HOW WELL DOES THE TECHNOLOGY CHANNEL WORK IN TURKEY?

Öz

The interaction between foreign direct investments (FDI) and economic growth is one of the frequently discussed issues in the literature, both theoretically and empirically. The role of different channels through which FDI promotes economic growth is an aspect that should be focused on. The main purpose of this study is to assess the impact of the technology spillovers as a driving force for economic growth of Turkey in terms of manufacturing industry using the data of 1988-2012 period. For this aim, the dynamic interactions between export of the manufacturing industry (EXP) as a measure of technology spillover, gross domestic product (GDP), gross fixed capital formation (GFCF) and FDI in manufacturing industry were investigated via cointegration and causality tests in addition to the innovation accounting techniques in the vector autoregressive (VAR) framework. While the cointegration test yields no clear evidence of long-run equilibrium relationship among these variables. Granger causality test indicates that there is a univariate causality running from the EXP to the all other variables, and FDI is not Granger cause for the other variables. Nevertheless, the positive impact of FDI on the GDP and EXP variables is observed within the results of the innovation accounting analysis. From this point of view, it is concluded that the FDI leads economic growth more significantly in indirect ways rather than through direct ways. Under the light of these empirical outcomes, proposing policies based on strategies which encourage FDI inflows to the sub-sectors of manufacturing industry with higher technological gaps seem as effective and valuable in terms of promoting economic growth.

Anahtar Kelimeler

Foreign direkt invesment, Economic growth, Manufacturing Industry

Kaynakça

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