The Relationship between Openness, Foreign Direct Investment, and Poverty: The Case of Turkey

19738

According to the theory of classical and neo-classical economics, the economic growth increases during the national economies demonstrate an outward-oriented inclination and it is estimated that these economies would reach to better welfare levels in this way because increases in foreign trade escalate the productivity and also encourage specialization by focusing on the goods that are commercialized for foreign trade. In addition, one of the methods of the needy countries in terms of capital supplying is to increase FDI inflows. That is why; long-term investments should be gained to economy. Within this context, it is important to determine whether openness and FDI capital inflows could contribute to the solution of poverty, which is a primeval problem, or not. The main purpose of this study is to examine the effect of openness and FDI inflows in Turkish economy in specific to 1980-2015 periods and their effect on poverty. While fulfilling this target, the aforementioned period has been investigated by using the method of time sequence. As the main finding, it has been concluded that openness and FDI inflows in Turkish economy have reduced the poverty in long-term period. As a result of Granger causality analyses, bidirectional causality relationship among FDI and poverty, and unidirectional causality relationship from openness thru poverty have been confirmed. In addition to this, there is a causality relationship from openness towards FDI inflows.

1106

Openness , FDI Inflows , Poverty , Cointegration , Granger Causality Analysis.

Gaziantep University Journal Of Social Sciences

1117

Gaziantep University Journal Of Social Sciences