INSTITUTIONAL QUALITY, REAL INCOME AND FOREIGN DIRECT INVESTMENT RELATIONSHIP IN TURKEY


ACARAVCI A., ARTAN S. , Erdogan S., Bostan Gokturk T.

JOURNAL OF MEHMET AKIF ERSOY UNIVERSITY ECONOMICS AND ADMINISTRATIVE SCIENCES FACULTY, cilt.5, ss.132-145, 2018 (ESCI İndekslerine Giren Dergi) identifier

  • Cilt numarası: 5 Konu: 2
  • Basım Tarihi: 2018
  • Doi Numarası: 10.30798/makuiibf.409819
  • Dergi Adı: JOURNAL OF MEHMET AKIF ERSOY UNIVERSITY ECONOMICS AND ADMINISTRATIVE SCIENCES FACULTY
  • Sayfa Sayıları: ss.132-145

Özet

Generally economy-institutional structure nexus, specifically foreign direct investment (FDI)-institutional structure nexus has been one of the most debated topic in economic literature. There are many papers about determinants of FDI. In this study, long-run relationships between institutional quality, real income and foreign direct investment examined in terms of Turkey for the period of 1990-2015 by using autoregressive distributed lag (ARDL) method. Results are as follows: i) While stationarity analysis results provide the preconditions for the ARDL cointegration test, ARDL bounds test results confirm that there is a long-run relationship between variables. ii) Increasing in real income and institutional quality positively affect foreign direct investment inflows. iii) Any deviation from the long-run equilibrium between variables is corrected about 84% for each period. The findings of this study emphasize that institutional quality is matter for foreign direct investment inflows as well. So, enhancing efforts of institutional quality encourage the foreign direct investment inflows.