An Inquiry on the Likely Effects of Corruption on the Foreign Direct Investments in Turkey

Mustafa Umur TOSUN, Mehmet Onur YURDAKUL
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There is no consensus in the literature about the direction of the impact of corruption on foreign direct investments. The aim of this paper is to explore the likely effects of corruption on the foreign direct investments in Turkey. For this purpose, the determinants of foreign direct investments inflows to Turkey from 19 countries over the period of 2002-2012 are examined by means of panel analysis through refining the “Gravity Model” by adding control variables and corruption indicators. The results indicate that the Turkish foreign direct investment inflows have both market and efficiency seeking patterns and corruption is a critical factor for the foreign direct investment inflows. 

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