Abstract:T he determinants of economic growth have been a much debated theoretical issue in the literature, especially after the endogenous growth theory of the late 1 980s. T his new theory highlights the importance of economic policies that lead to an increasing rate of return. In particular, it is argued that human capital, trade liberalization and financial development may play very important roles in the determination of economic growth. T his paper tries to empirically estimate the joint impacts of trade liberalization and financial development on economic growth for the period 1 960-2004. Instead of using common proxies for the issue, principal components analysis is employed to develop better measures (indexes) for trade liberalization, financial development and the joint effects of both. T he empirical results obtained from the J ohansen co-integration procedure show that trade liberalization, financial development and the joint impacts of both positively contributed to economic growth in T urkey for the period 1 963-2005.
Foreign direct investments are regarded as a significant source of investment in developing countries. However, foreign direct investments may affect domestic investments in different aspects. They can enforce the domestic firms to crowd out of the sector, or crowd in them.In this study; the effects of foreign direct investments for developing countries was examined by means of panel unit root tests and dynamic panel data analysis, within using belonging 35 countries 1992-2010 period data. As an empirical results obtained from the analysis; foreign direct investments increases domestic investments and has got crowding in effects in developing countries. In these countries, $1 of foreign direct investment (FDI) causes $2.64 increasing in total investment.
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