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The Impact of Political Stability and Macroeconomic Variables on Foreign Direct Investment in Turkey

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Innovation of Businesses, and Digitalization during Covid-19 Pandemic (ICBT 2021)

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Abstract

Foreign direct investment (FDI) is one of the most practical types of foreign investment. FDI contributes to job creation, foreign exchange earnings and national income escalation, improving semi-skill and skilled labor. Based on our knowledge, this paper is the first study attempting to investigate the effect of political stability on the FDI in Turkey using an econometric approach. Achieving this objective, a co-integration analysis was conducted between the FDI and its determinants in the short-run and long-run including “macroeconomic indicators” and “Political Stability (PS)” in Turkey. Using annual data from 1974 to 2017 via Auto-Regressive Distributed Lag (ARDL) model. The results confirm the positive correlation between Gross Domestic Product (GDP), openness, domestic savings and political stability and FDI inflows. They also confirm the negative impact of energy consumption, population and inflation on FDI inflows.

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Authors and Affiliations

  1. College of Graduate Studies, Universiti Tenaga National, Jalan IKRAM-UNITEN, 43000, Kajang, Selangor, Malaysia

    Mohammad Khudari & Mohammed Ammeen Fadhil

  2. Faculty of Industrial Management, Universiti Malaysia Pahang, Lebuhraya Tun Razak, 26700, Gambang, Malaysia

    Noraina Mazuin Sapuan

  3. College of Administration and Economics, University of Baghdad, Baghdad, Iraq

    Mohammed Ammeen Fadhil

Authors
  1. Mohammad Khudari
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  2. Noraina Mazuin Sapuan
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  3. Mohammed Ammeen Fadhil
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Corresponding author

Correspondence to Mohammad Khudari .

Editor information

Editors and Affiliations

  1. Northern Cyprus Campus, Middle East Technical University, via Mersin 10, Turkey

    Bahaaeddin Alareeni

  2. College of Business of Finance, Ahlia University, Manama, Bahrain

    Allam Hamdan

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Khudari, M., Sapuan, N.M., Fadhil, M.A. (2023). The Impact of Political Stability and Macroeconomic Variables on Foreign Direct Investment in Turkey. In: Alareeni, B., Hamdan, A. (eds) Innovation of Businesses, and Digitalization during Covid-19 Pandemic. ICBT 2021. Lecture Notes in Networks and Systems, vol 488. Springer, Cham. https://doi.org/10.1007/978-3-031-08090-6_31

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  • DOI: https://doi.org/10.1007/978-3-031-08090-6_31

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-031-08089-0

  • Online ISBN: 978-3-031-08090-6

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