Real exchange rate, wealth, wages and foreign direct investment in Turkey

In this study, the relationship between real exchange rates, relative wealth, relative wages and foreign direct investment inflows to Turkey is examined. Fixed effects regressions are used on foreign direct investment inflow data from eight countries over the period 1986-1995, The results show that a depreciation of the Turkish lira, an increase in Turkish wages relative to the corresponding source country wages, and a decrease in relative wealth are associated with increases in FDI inflows to Turkey.