The Importance of FDI Inflows in Turkey

Abstract

The Republic of Turkey is located at the threshold of Eurasia consolidating the East with the West and North with the South. Moreover, it is at the conjunction of many investment and commercial routes. These advantages disposition gives Turkey a favorable investment climate especially in the form of FDI. The volume of FDI in the world is well over 1 trillion USDs, but Turkey can attract only a small amount of it. Even tough Turkey has substantial foreign debt and commercial deficits, it still has a strong government with political stability. Thus, the aim of this paper is to present the literature on FDI, FDI and economic growth nexus, a historical background of FDI in Turkey, and FDI's contributions to the Turkish economy.