Determinants of Turkish outward FDI, 1992-2005


Kayam S. S. , Hisarciklilar M.

IKTISAT ISLETME VE FINANS, vol.24, no.280, pp.47-70, 2009 (Journal Indexed in SSCI) identifier

  • Publication Type: Article / Article
  • Volume: 24 Issue: 280
  • Publication Date: 2009
  • Doi Number: 10.3848/iif.2009.280.4933
  • Title of Journal : IKTISAT ISLETME VE FINANS
  • Page Numbers: pp.47-70

Abstract

Determinants of Turkish outward FDI, 1992-2005 In this study, we examine the determinants of outward direct investment from Turkey to eleven countries which constitute the bulk of outward stock in the period 1992-2005. A gravity model is estimated by random effects modeling considering factors such as bilateral trade, economic stability, and productivity as well as the basic gravity variables of gross domestic product per capita for both the source and destination countries, the distance between them, and population. The evidence shows that Turkish outward direct investments are mainly market oriented/horizontal FDI and are positively related to distance and to Turkish exports to the destination country. An interesting finding reveals that Turkish outward investments are negatively related to both the source and destination country gross domestic product per capita. This actually fosters the need to look into the sectors and product range of these Turkish companies abroad.