ARE FOREIGN DIRECT INVESTMENT FLOWS TO TURKEY REALLY BENEFICIAL?
TÜRKİYE’YE YÖNELİK DOĞRUDAN YABANCI YATIRIM AKIMLARI GERÇEKTEN YARARLI MI?

Author : Soner UYSAL
Number of pages : 471-488

Abstract

Low income of developing countries causes low savings and hence low investments that leads to a cycle. Therefore, developing countries use the foreign capital in order to grow faster and to invest more than their saving capacity. Considering all of the international capital flows, foreign direct investments (FDIs) are more advantageous compared to the portfolio investments and other investments. FDI inflows have increased dramatically worldwide after 1980s when Neo – liberal policies gained popularity. With the globalization process, the number of multinational companies is increased, activities of these companies are expanded and the amount of these companies’ capital is reached to enormous sizes. Thus, with its open economic policy since the early 1980s and removing obstacles to capital movements in 1989, Turkey has been one of the countries that reached gigantic size where capital managers invest in. So are there any disadvantages of FDIs which is indicated as more advantageous compared to other international capital flows and are FDIs in Turkey really useful? In this study, these related questions are tried to be answered by examining FDIs in terms of mergers and acquisitions, and from sectorial and technological levels. According to the analysis results, after 2000s FDIs to Turkey took place as mostly in the form of mergers and acquisitions including privatizations. From a sectorial perspective, FDIs particularly in finance sector have undergone a structural transformation towards to service sector. The share of investments in the industrial sector is declining and investments to manufacturing industry as a part of industrial sector is also declining. In addition, technological structure of the manufacturing industry is concentrated in the low level.

Keywords

Foreign Direct Investments, Multinational Companies, Privatizations, Technological Change, Turkish E

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