Global foreign direct investments have increased substantially in the world together with the financial integration of world economy especially since 1980s. International trade and foreign direct investment are important for all economies especially in emerging markets like Turkey. Additionally, these two variables are tightly related.This paper examines the relationship between foreign direct investment and international trade in Turkey for a panel of 44 countries during the period 2001 - 2011, using annual data. We use PCSE and FGLS methods to estimate the models. We found a complementary relationship both between outward FDI and export and outward FDI and import while inward FDI has no effect on export and import.
Key words: Foreign Direct Investments, International Trade, Globalization, Time Series Cross Section (TSCS) Data. JEL Classification: F10, F40, C33. Article Language: EnglishTurkish
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