The Relationship Between Corruption and Foreign Direct Investment Inflows in Turkey: An Empirical Examination
<p>In the corruption literature, most of the studies indicate that corruption has adverse effects on the investment environment and thus it diminishes foreign direct investment (FDI) inflows. However, regarding the so-called adverse effects between FDI and corruption, it is noticed that some s...
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Babes-Bolyai University, Cluj-Napoca
2014-06-01
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| Series: | Transylvanian Review of Administrative Sciences |
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| Online Access: | https://rtsa.ro/tras/index.php/tras/article/view/100 |
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| author | M. Umur TOSUN M. Onur YURDAKUL Pelin VAROL İYIDOĞAN |
| author_facet | M. Umur TOSUN M. Onur YURDAKUL Pelin VAROL İYIDOĞAN |
| author_sort | M. Umur TOSUN |
| collection | DOAJ |
| description | <p>In the corruption literature, most of the studies indicate that corruption has adverse effects on the investment environment and thus it diminishes foreign direct investment (FDI) inflows. However, regarding the so-called adverse effects between FDI and corruption, it is noticed that some studies reached to conclusions in the opposite direction. In this study, the causality relationship among corruption, political risk, industrial production index (as a proxy to gross domestic product) and FDI entrance variables for Turkey over the period 1992M01-2010M12 is analyzed by means of Pesaran, Shin and Smith (2001) bounds test approach of cointegration and error correction methods. As a result, it is found that corruption has distortive effects on FDI in Turkey both for short and long run periods and this indicates that ‘helping hand’ corruption does not exist in Turkey. In addition, in the long run, FDI increases with raising income. Contrary to the expectations, it is detected that increase in political risk contributes to FDI inflows in the short run.</p> |
| format | Article |
| id | doaj-art-8d9c34cc7faa4fe6ae3a56f0da1147b6 |
| institution | Matheson Library |
| issn | 1842-2845 |
| language | English |
| publishDate | 2014-06-01 |
| publisher | Babes-Bolyai University, Cluj-Napoca |
| record_format | Article |
| series | Transylvanian Review of Administrative Sciences |
| spelling | doaj-art-8d9c34cc7faa4fe6ae3a56f0da1147b62025-07-03T07:31:27ZengBabes-Bolyai University, Cluj-NapocaTransylvanian Review of Administrative Sciences1842-28452014-06-011042247257116The Relationship Between Corruption and Foreign Direct Investment Inflows in Turkey: An Empirical ExaminationM. Umur TOSUN0M. Onur YURDAKUL1Pelin VAROL İYIDOĞAN2Associate Professor, Department of Public Finance, Hacettepe University, Ankara, TurkeyPhD, Finance Expert, Financial Crimes Investigation Board, Ministry of Finance, Ankara, TurkeyAssistant Professor, Department of Public Finance, Hacettepe University, Ankara, Turkey<p>In the corruption literature, most of the studies indicate that corruption has adverse effects on the investment environment and thus it diminishes foreign direct investment (FDI) inflows. However, regarding the so-called adverse effects between FDI and corruption, it is noticed that some studies reached to conclusions in the opposite direction. In this study, the causality relationship among corruption, political risk, industrial production index (as a proxy to gross domestic product) and FDI entrance variables for Turkey over the period 1992M01-2010M12 is analyzed by means of Pesaran, Shin and Smith (2001) bounds test approach of cointegration and error correction methods. As a result, it is found that corruption has distortive effects on FDI in Turkey both for short and long run periods and this indicates that ‘helping hand’ corruption does not exist in Turkey. In addition, in the long run, FDI increases with raising income. Contrary to the expectations, it is detected that increase in political risk contributes to FDI inflows in the short run.</p>https://rtsa.ro/tras/index.php/tras/article/view/100foreign direct investmentscorruptionpolitical riskincomebounds test |
| spellingShingle | M. Umur TOSUN M. Onur YURDAKUL Pelin VAROL İYIDOĞAN The Relationship Between Corruption and Foreign Direct Investment Inflows in Turkey: An Empirical Examination Transylvanian Review of Administrative Sciences foreign direct investments corruption political risk income bounds test |
| title | The Relationship Between Corruption and Foreign Direct Investment Inflows in Turkey: An Empirical Examination |
| title_full | The Relationship Between Corruption and Foreign Direct Investment Inflows in Turkey: An Empirical Examination |
| title_fullStr | The Relationship Between Corruption and Foreign Direct Investment Inflows in Turkey: An Empirical Examination |
| title_full_unstemmed | The Relationship Between Corruption and Foreign Direct Investment Inflows in Turkey: An Empirical Examination |
| title_short | The Relationship Between Corruption and Foreign Direct Investment Inflows in Turkey: An Empirical Examination |
| title_sort | relationship between corruption and foreign direct investment inflows in turkey an empirical examination |
| topic | foreign direct investments corruption political risk income bounds test |
| url | https://rtsa.ro/tras/index.php/tras/article/view/100 |
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