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Despite the growing interest in foreign direct investment (FDI), substantial uncertainty still exists regarding what stimulates foreign investors to operate in a foreign market. Besides, previous studies have attributed the determinants of direct investments to locational and firmspecific factors. However, firm-specific and locational factors may vary across industries and their sub-sectors, as proposed by Dunning (1998). Using panel data for the 2007 to 2012 period, the major determinants of foreign investments into the manufacturing subsectors in Turkey are analyzed in this study. Strong evidence is found that turnover indices and new investment incentives introduced in 2009 have a positive impact on FDI; conversely, taxes, the country risk index of the USA, and the price of coking coal have a negative effect. The study fails to establish a significant impact of Country Risk index on Turkey and the price of natural gas.



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This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.