Foreign Direct İnvestment and Wages: Empirical Evidence from TurkeyLabor market effects of foreign direct investment have gained an important ground for recipient countries. Within this context, this article attempts to delve deeper into these topics and provides empirical answers to the question of whether foreign direct investment has positive and significant impact on Turkish labor market in terms of real wages. In this study, the effects of foreign direct investment on real wages were examined in Turkey for the period of 1992:1-2008:4 by the help of variance decomposition and impulse response functions of vector autoregression (VAR) model. According to the empirical results, foreign direct investment has negative but insignificant effects on wages, whereas the volume of trade can contribute positively and significantly to the rise in real wages.
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