DO FOREIGN DIRECT INVESTMENTS DOMINATE FINANCIAL MARKETS: AN EMPIRICAL ANALYSIS FOR TURKIYE
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Tarih
2023
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info:eu-repo/semantics/openAccess
Özet
In the last century, foreign direct investments have been encouraged by many countries as a source of capital creation. At the same time, criticisms continued those foreign investors were taking over the markets in many small-economies and even as dominant powers controlling financial systems and shaping the country's economy. This study was conducted to reveal whether there is a causal relationship between foreign direct investments and financial indicators, and to shed light on the criticisms of the dominance of foreign direct investments in financial markets. In addition, the literature on foreign direct investments has been extensively discussed in order to offer strong recommendations. In the study, to determine the causality relationship of foreign direct investment (FDI) inflows to Turkey and financial indicator variables were used monthly data for the period 2005/09-2018/10 and Lumsdaine-Papell Structural Break Test, VAR model and Toda-Yamamoto Causality Test. Findings revealed that there is a two-way relationship between FDI and BIST100 index, and a one-way relationship with foreign exchange buying rate and commercial loan interest from foreign direct investments. The finding that there is a one-way relationship from FDI to commercial loan interest reveals that FDI should be added to the literature as one of the factors affecting the commercial loan interest rate. On the other hand, no causal relationship was found between foreign direct investments and benchmark interest rate, deposit interest rate and domestic loans extended by banks. In line with the literature review and research findings, suggestions were made to policy makers and other researchers on the subject.
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16
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63
