Can FDI be a Panacea for Unemployment? The Turkish Case

Mehtap Hisarciklilar, Derya Gültekin-Karakaş, Ahmet A. Asici

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

Foreign Direct Investment (FDI) currently constitutes the main mechanism for economic globalisation. Despite the rising integration of the Turkish economy into the global economy, FDI performance of Turkey remained lower than many other developing countries until the early 2000s. This was followed by a period of a boom in which Turkey attracted record levels of FDI inflows in her history. Accompanying these inflows, the country also achieved high rates of growth. However, high unemployment rates continued to be a major problem. This chapter seeks to explain the role of FDI inflows in job creation in Turkey at a sectoral level for the period 2000–2008. We use panel data analysis and find a positive, but weak relationship between FDI inflows and employment. Merger and acquisitions, as the dominant mode of foreign entry in Turkey, and/or the dominance of the FDI inflows in the financial sector after 2004 might be the reasons for this weak employment effect. Moreover, the tendency for the shift of foreign investment from low-tech to medium-and high-tech industries in Turkish manufacturing could lead to the negligible effect on employment.
Original languageEnglish
Title of host publicationLabor and Employment Relations in a Globalized World
EditorsToker Dereli, Y. Pinar Soykut-Sarica, Asli Sen-Tasbasi
PublisherSpringer
Chapter3
Pages43-70
Number of pages28
ISBN (Electronic)9783319043494
ISBN (Print)9783319043487
DOIs
Publication statusPublished - 6 Mar 2014

Publication series

NameContributions to Economics
PublisherSpringer
ISSN (Print)1431-1933
ISSN (Electronic)2197-7178

Fingerprint

Unemployment
Foreign direct investment
Turkey
High-tech industry
Financial sector
Global economy
Developing countries
Mergers and acquisitions
Turkish economy
Employment effects
Investment performance
Foreign investment
Manufacturing
Foreign entry
Economic globalization
Unemployment rate
Panel data analysis
Job creation

Keywords

  • Foreign Direct Investment
  • Foreign Investment
  • Foreign Capital
  • Foreign Direct Investment Inflow
  • Foreign Affiliate

Cite this

Hisarciklilar, M., Gültekin-Karakaş, D., & Asici, A. A. (2014). Can FDI be a Panacea for Unemployment? The Turkish Case. In T. Dereli, Y. P. Soykut-Sarica, & A. Sen-Tasbasi (Eds.), Labor and Employment Relations in a Globalized World (pp. 43-70). (Contributions to Economics). Springer. https://doi.org/10.1007/978-3-319-04349-4_3

Can FDI be a Panacea for Unemployment? The Turkish Case. / Hisarciklilar, Mehtap; Gültekin-Karakaş, Derya; Asici, Ahmet A.

Labor and Employment Relations in a Globalized World. ed. / Toker Dereli; Y. Pinar Soykut-Sarica; Asli Sen-Tasbasi. Springer, 2014. p. 43-70 (Contributions to Economics).

Research output: Chapter in Book/Report/Conference proceedingChapter

Hisarciklilar, M, Gültekin-Karakaş, D & Asici, AA 2014, Can FDI be a Panacea for Unemployment? The Turkish Case. in T Dereli, YP Soykut-Sarica & A Sen-Tasbasi (eds), Labor and Employment Relations in a Globalized World. Contributions to Economics, Springer, pp. 43-70. https://doi.org/10.1007/978-3-319-04349-4_3
Hisarciklilar M, Gültekin-Karakaş D, Asici AA. Can FDI be a Panacea for Unemployment? The Turkish Case. In Dereli T, Soykut-Sarica YP, Sen-Tasbasi A, editors, Labor and Employment Relations in a Globalized World. Springer. 2014. p. 43-70. (Contributions to Economics). https://doi.org/10.1007/978-3-319-04349-4_3
Hisarciklilar, Mehtap ; Gültekin-Karakaş, Derya ; Asici, Ahmet A. / Can FDI be a Panacea for Unemployment? The Turkish Case. Labor and Employment Relations in a Globalized World. editor / Toker Dereli ; Y. Pinar Soykut-Sarica ; Asli Sen-Tasbasi. Springer, 2014. pp. 43-70 (Contributions to Economics).
@inbook{42133c3b881349229376672bdd9e1013,
title = "Can FDI be a Panacea for Unemployment?: The Turkish Case",
abstract = "Foreign Direct Investment (FDI) currently constitutes the main mechanism for economic globalisation. Despite the rising integration of the Turkish economy into the global economy, FDI performance of Turkey remained lower than many other developing countries until the early 2000s. This was followed by a period of a boom in which Turkey attracted record levels of FDI inflows in her history. Accompanying these inflows, the country also achieved high rates of growth. However, high unemployment rates continued to be a major problem. This chapter seeks to explain the role of FDI inflows in job creation in Turkey at a sectoral level for the period 2000–2008. We use panel data analysis and find a positive, but weak relationship between FDI inflows and employment. Merger and acquisitions, as the dominant mode of foreign entry in Turkey, and/or the dominance of the FDI inflows in the financial sector after 2004 might be the reasons for this weak employment effect. Moreover, the tendency for the shift of foreign investment from low-tech to medium-and high-tech industries in Turkish manufacturing could lead to the negligible effect on employment.",
keywords = "Foreign Direct Investment, Foreign Investment, Foreign Capital, Foreign Direct Investment Inflow, Foreign Affiliate",
author = "Mehtap Hisarciklilar and Derya G{\"u}ltekin-Karakaş and Asici, {Ahmet A.}",
year = "2014",
month = "3",
day = "6",
doi = "10.1007/978-3-319-04349-4_3",
language = "English",
isbn = "9783319043487",
series = "Contributions to Economics",
publisher = "Springer",
pages = "43--70",
editor = "Toker Dereli and Soykut-Sarica, {Y. Pinar} and Asli Sen-Tasbasi",
booktitle = "Labor and Employment Relations in a Globalized World",

}

TY - CHAP

T1 - Can FDI be a Panacea for Unemployment?

T2 - The Turkish Case

AU - Hisarciklilar, Mehtap

AU - Gültekin-Karakaş, Derya

AU - Asici, Ahmet A.

PY - 2014/3/6

Y1 - 2014/3/6

N2 - Foreign Direct Investment (FDI) currently constitutes the main mechanism for economic globalisation. Despite the rising integration of the Turkish economy into the global economy, FDI performance of Turkey remained lower than many other developing countries until the early 2000s. This was followed by a period of a boom in which Turkey attracted record levels of FDI inflows in her history. Accompanying these inflows, the country also achieved high rates of growth. However, high unemployment rates continued to be a major problem. This chapter seeks to explain the role of FDI inflows in job creation in Turkey at a sectoral level for the period 2000–2008. We use panel data analysis and find a positive, but weak relationship between FDI inflows and employment. Merger and acquisitions, as the dominant mode of foreign entry in Turkey, and/or the dominance of the FDI inflows in the financial sector after 2004 might be the reasons for this weak employment effect. Moreover, the tendency for the shift of foreign investment from low-tech to medium-and high-tech industries in Turkish manufacturing could lead to the negligible effect on employment.

AB - Foreign Direct Investment (FDI) currently constitutes the main mechanism for economic globalisation. Despite the rising integration of the Turkish economy into the global economy, FDI performance of Turkey remained lower than many other developing countries until the early 2000s. This was followed by a period of a boom in which Turkey attracted record levels of FDI inflows in her history. Accompanying these inflows, the country also achieved high rates of growth. However, high unemployment rates continued to be a major problem. This chapter seeks to explain the role of FDI inflows in job creation in Turkey at a sectoral level for the period 2000–2008. We use panel data analysis and find a positive, but weak relationship between FDI inflows and employment. Merger and acquisitions, as the dominant mode of foreign entry in Turkey, and/or the dominance of the FDI inflows in the financial sector after 2004 might be the reasons for this weak employment effect. Moreover, the tendency for the shift of foreign investment from low-tech to medium-and high-tech industries in Turkish manufacturing could lead to the negligible effect on employment.

KW - Foreign Direct Investment

KW - Foreign Investment

KW - Foreign Capital

KW - Foreign Direct Investment Inflow

KW - Foreign Affiliate

U2 - 10.1007/978-3-319-04349-4_3

DO - 10.1007/978-3-319-04349-4_3

M3 - Chapter

SN - 9783319043487

T3 - Contributions to Economics

SP - 43

EP - 70

BT - Labor and Employment Relations in a Globalized World

A2 - Dereli, Toker

A2 - Soykut-Sarica, Y. Pinar

A2 - Sen-Tasbasi, Asli

PB - Springer

ER -