What drives foreign direct investment into emerging markets? Evidence from Turkey

Abstract

The total volume of foreign direct investment (FDI) has increased immensely over the past decade and has become an important impetus behind the economic growth in developing countries. This paper examines the driving factors of FDI in Turkey. The data were collected through a survey of managers and expatriates of firms with foreign capital operating in Turkey and analyzed using nonparametric and parametrical statistical tests. The results show that foreign investors in Turkey regard economic and political instability as the most important barrier and an overwhelming majority of the respondents recommend the establishment of political stability in the country.