The dynamics of foreign direct investment in Turkey from a historical perspective

Abstract

In this thesis I discussed different components of foreign direct investment inflows from the perspective of hosting countries. Since foreign direct investment has been accepted as an important tool for the development of economies, FDI has taken particular attention by governments and there has been a huge competition to attract FDI. Last years show an improvement in FDI attraction of Turkey which can be explained through commitment to liberalization, privatization and influence of EU. In fact reforms made to fulfill EU criteria were only one among many influences of EU on FDI inflows. European countries have a tendency to channel FDI within the borders of EU which consequently renders EU membership is an important advantage for attracting FDI from EU countries. Signals of this advantage when coupled with the geographical position of Turkey showed itself positively in statistics of FDI in Turkey. To illustrate the effects of the relationship with the EU, I provide a comparative analysis with Romania and Argentina. Three of the cases-Turkey, Romania and Argentina- point out to iv the fact that structure of the economy, privatization and liberalization, stability and international networks (as in the case of the EU) matter considerably when we discuss general trends of FDI inflows.