Importance and development of foreign direct investment: an analysis for Turkey

After 1980, with the increased globalization race investments in Turkey increased significantly with the lifting of barriers to capital flows. With the Economic Stability Decisions of January 24, 1980, Turkey entered this race and entered into full financial release with Decree No. 32 issued in 1989. In this study, the relationship between inflation, unemployment and industrial production, which is one of the economic indicators of foreign direct investments in Turkey, was analyzed with the VAR model. Johansen cointegration test, Impulse - Response analysis and Variance Decomposition analysis were conducted to evaluate the relationship between variables. The outcomes highlight that inflation, unemployment and industrial production have a crucial impact on foreign investments for Turkey.