Determinants of Turkish FDI Abroad

Saime Suna Kayam, Mehtap Hisarciklilar

Research output: Contribution to journalArticlepeer-review


This study examines the determinants of Turkish outward FDI
employing a gravity model. The model estimates the impact of traditional gravity variables, as well as openness, labour productivity, infrastructure, institutions and economic stability on FDI outflows from Turkey to 11 countries, which account for
approximately 90% of Turkish outward FDI stock, over the period 1999-2005 years using panel data random effects technique. The results reveal that Turkish FDI has a market-seeking pattern with foreign markets being substituted for domestic market by
Turkish firms. On the other hand, economic instability in Turkey emerges as a major deterrent of FDI outflows. Additionally, our results suggest the possibility of FDI in vertically differentiated products in host countries by Turkish investors as well as the
importance of push factors.
Original languageEnglish
Article number17813
Number of pages17
JournalTopics in Middle Eastern and North African Economies (electronic journal)
Publication statusPublished - 2009
Externally publishedYes


  • foreign direct investment
  • gravity mode
  • panel data econometrics


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