Understanding The Factors That Affect Foreign Direct Investment in Turkey By Using MARS Method

Finansal Araştırmalar ve Çalışmalar Dergisi, Cilt: 10, Sayı: 18, Ocak 2018, ISSN: 1309-1123, ss. 177-192

16 Pages Posted: 11 Oct 2018

Date Written: September 18, 2018

Abstract

Increasing foreign direct investment amount is very significant especially for developing countries in order to improve economy. Because of this situation, defining the factors that affect foreign direct investment is essential. Within this context, the main purpose of this study is to identify the influencing factors of foreign direct investment in Turkey. Within this scope, annual data for the periods between 1988 and 2015 was analyzed in this study. In addition to this situation, Multivariate Adaptive Regression Splines (MARS) method was used so as to achieve this objective. According to the results of the analysis, it was determined that current account deficit problem of Turkey affects foreign direct invest negatively. It was identified that if the ratio of current account deficit to total GDP is higher than “3.57”, foreign direct investment goes down. This result shows that foreign investors do not prefer to make investment since current account deficit increases fragility in the economy and it is considered as the leading indicator of the economic crisis. While considering the results of this study, it was recommended that current account deficit problem should be minimized to attract foreign investors make investment in Turkey.

Keywords: Foreign Direct Investment, MARS, Turkey

JEL Classification: E22, E27, F21

Suggested Citation

Zengin, Sinemis and Yüksel, Serhat and Kartal, Mustafa Tevfik, Understanding The Factors That Affect Foreign Direct Investment in Turkey By Using MARS Method (September 18, 2018). Finansal Araştırmalar ve Çalışmalar Dergisi, Cilt: 10, Sayı: 18, Ocak 2018, ISSN: 1309-1123, ss. 177-192 , Available at SSRN: https://ssrn.com/abstract=3251411

Sinemis Zengin

Independent ( email )

Serhat Yüksel

Istanbul Medipol University ( email )

Kavacık Mah. Ekinciler Cad. No.19 Kavacık Kavşağı
Beykoz
Istanbul, 34810
Turkey

Mustafa Tevfik Kartal (Contact Author)

Borsa Istanbul ( email )

Reşitpaşa Mah. Borsa İstanbul Cad. No: 4
Borsa İstanbul Cad. No: 4
Istanbul, 34467
Turkey

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
60
Abstract Views
331
rank
441,025
PlumX Metrics