The volume of total investment of a country comprises of the summation of domestic and foreign investment. In this sense, the effects of crowding in and out of foreign investment on domestic investment are crucial. If crowding out effect exists, an iner e as e in total investment w ili be possibly smaller than an increase in foreign investment. When crowding in effect exists, an increase in total investment will be greater than an increase in foreign investment. The aim of this study is to determine either crowding-in or crowding-out effect of foreign investment on domestic investment. Tests ran in regard of sub sectors of manufacturing industry. Because of the active entered data, starting from 1993, of direct foreign investment by sectorel division, the study covers the period of 1993-2000. Panel datafor the mentioned periodfor sectors in the study is used to analyze the thesis of the paper.
Article Language: Turkish English