Proceedings of the 12th International Academic Conference, Prague

FOREIGN DIRECT INVESTMENT AND EXPORT IN TURKEY: A COINTEGRATION ANALYSIS

ADEM ÖĞÜT, MEHMET MUCUK, MUSTAFA TAHIR DEMIRSEL

Abstract:

Foreign direct investment has an important role for developing countries. This study aims to investigate the impact of foreign direct investment on export in Turkey over the period of 1992:01-2014:05. The Johansen cointegration, impulse response functions and variance decomposition techniques are used in order to analyse the causal relationship between foreign direct investment and Turkish export. According to obtained findings there is a relationship between these variables in long term. In other words, foreign direct investment and export are cointegrated. Impulse response functions showed that Turkish export reacts positively to shocks in foreign direct investment. Empirical findings suggest that export is affected by foreign direct investment.

Keywords: Foreign Direct Investment, Turkish Export, Turkish Economy

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