SavedAdd your journal

Journals / Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi / 2021 / Sayı: 60

The Effect of Institutional Governance Quality on Foreign Direct Invesment: A Research on Middle Income Countries

Kurumsal Yönetişim Kalitesinin Doğrudan Yabancı Yatırımlar Üzerindeki Etkisi: Orta Gelirli Ülkeler Üzerine Bir Araştırma

Esra Karpuz(Kütahya Dumlupınar Üniversitesi)0000-0003-2765-4082
Özlem Sayılır(ANADOLU ÜNİVERSİTESİ)0000-0001-9598-3545
Pages
281–308
Publication Date
2021-12-25
🏛️Bibliographic metadata and full text access for this article are provided via DergiPark.
DergiPark Record ↗
✨

AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

Besides, an increase in trade openness and domestic investment level increase countries’ foreign direct investment inflows.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:Foreign direct investments play an important role in increasing the economic prosperity and international competitiveness of countries in the global and liberal economy of the 21st century.
📊
Key Findings & Data:In this context, the aim of this study is to research the effect of institutional governance indicators defined by World Bank in the 20 middle income countries, in which Turkey is also included, for 2002-2018 period.
💡
Conclusion & Impact:Besides, an increase in trade openness and domestic investment level increase countries’ foreign direct investment inflows.
🔬Design:Research Article
📍Scope:2002-2018 Verileri
⚙️Variables:Doğrudan yabancı yatırım · Kurumsal yönetişim · Orta gelirli ülkeler

Abstract

Foreign direct investments play an important role in increasing the economic prosperity and international competitiveness of countries in the global and liberal economy of the 21st century. This situation directs the developing economies, which recognize the importance of foreign direct investments, to produce and renew policies to attract investments to their countries. In this context, the aim of this study is to research the effect of institutional governance indicators defined by World Bank in the 20 middle income countries, in which Turkey is also included, for 2002-2018 period. The dependent variable of the study is the share of foreign direct investment inflows in the gross domestic product, while the independent variables are the control of corruption, government effectiveness, political stability and the absence of violence, regulatory quality, rule of law and voice and accountability. In the study, the relationship between variables is tested with panel data analysis by using annual data sets. According to the findings from the analysis, political stability and absence of violence and regulatory quality variables have a positive effect; government effectiveness has negative effect on foreign direct investment inflows. Besides, an increase in trade openness and domestic investment level increase countries’ foreign direct investment inflows.

Özet

Doğrudan yabancı yatırımlar 21. yy global ve liberal ekonomisinde, ülkelerin ekonomik refah düzeyini ve uluslararası rekabet gücünü arttırabilmesinde önemli rol oynamaktadır. Bu durum, doğrudan yabancı yatırımların önemini fark eden gelişmekte olan ekonomileri, yatırımları ülkelerine çekmek için politikalar üretmeye ve yenilemeye yöneltmektedir. Bu bağlamda çalışmanın amacı, Dünya Bankası tarafından belirlenen kurumsal yönetişim göstergelerinin Türkiye’nin de dahil olduğu 20 orta gelirli ülkedeki doğrudan yabancı yatırım girişlerine etkisini 2002-2018 dönemi için araştırmaktır. Çalışmanın bağımlı değişkenini doğrudan yabancı yatırım girişlerinin gayrı safi yurtiçi hasıla içindeki payı, bağımsız değişkenlerini ise yolsuzluğun kontrolü, hükümetin etkililiği, politik istikrar ve şiddetin yokluğu, düzenleyici kalitesi, hukukun üstünlüğü ile ifade özgürlüğü ve hesap verilebilirlik oluşturmaktadır. Çalışmada yıllık veri setleri kullanılarak değişkenler arasındaki ilişki panel veri analizi ile test edilmektedir. Analizden elde edilen bulgulara göre, doğrudan yabancı yatırım girişleri üzerinde politik istikrar ve şiddetin yokluğu ile düzenleyici kalitesi değişkenleri pozitif; hükümetin etkililiği değişkeni ise negatif etkilidir. Ayrıca, kontrol değişkenleri olarak kullanılan ticarete açıklık ile yurtiçi yatırım düzeyindeki artış ülkelerin doğrudan yabancı yatırım girişlerini arttırmaktadır.

🔖

Cite This Article

Karpuz, E., Sayılır, Ö., *, E. K. (2021). The Effect of Institutional Governance Quality on Foreign Direct Invesment: A Research on Middle Income Countries. Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Sayı: 60, 281–308. https://doi.org/10.18070/erciyesiibd.930284

📄 Full Text PDF Viewer

📄

PDF görüntüleyici hazırlanıyor...

References (46)

  1. Acaravcı, A., Artan, S., Erdoğan, S., & Göktürk, Bostan, T. (2018). Türkiye’de Kurumsal Kalite ve DYY’ler İlişkisi. Mehmet Akif Ersoy Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 5(2). https://doi.org/10.30798/makuiibf.409819
  2. Adams, S. (2009). Foreign Direct Investment, Domestic Investment, and Economic Growth in Sub-Saharan Africa. Journal of Policy Modeling, 31(6), 939–949. https://doi.org/10.1016/j.jpolmod.2009.03.003
  3. Aizenman, J., & Noy, I. (2006). FDI and Trade-Two-way Linkages? Quarterly Review of Economics and Finance, 46(3), 317–337. https://doi.org/10.1016/j.qref.2006.02.004
  4. Akın, M. Ş. (2009). How Is the Market Size Relevant as a Determinant of FDI in Developing Countries? A Research on Population and the Cohort Size. In International Symposium on Sustainable Development.
  5. Amal, M., Tomio, B. T., & Raboch, H. (2010). Determinants of Foreign Direct Investment in Latin America. Journal of Globalization, Competitiveness & Governability, 4(3), 116–133. https://doi.org/10.3232/GCG.2010.V4.N3.07
  6. Artan, S., & Hayaloğlu, P. (2015). Doğrudan Yabancı Sermaye Yatırımlarının Kurumsal Belirleyicileri: OECD Ülkeleri Örneği. Ege Akademik Bakis (Ege Academic Review), 15(4), 551–564. https://doi.org/10.21121/eab.2015416654
  7. Baltagi, B. H. (2005). Econometric Analysis of Panel Data (Third Edit). John Wiley & Sons.
  8. Bénassy-Quéré, A., Coupet, M., & Mayer, T. (2005). Institutional Determinants of Foreign Direct Investment. World Economy, 30(5), 764–782. https://doi.org/10.1111/j.1467-9701.2007.01022.x
  9. Biro, F. P., Erdey, L., Gall, J., & Markus, A. (2019). The Effect of Governance on Foreign Direct Investment in Latin America — Issues Of Model Selection. Global Economy Journal, 19(01), 1950006. https://doi.org/10.1142/S2194565919500064
  10. Buchanan, B. G., Le, Q. V., & Rishi, M. (2012). Foreign direct investment and institutional quality: Some empirical evidence. In International Review of Financial Analysis (Vol. 21, pp. 81–89). https://doi.org/10.1016/j.irfa.2011.10.001
  11. Busse, M., & Hefeker, C. (2007). Political Risk, Institutions and Foreign Direct Investment. European Journal of Political Economy, 23(2), 397–415. https://doi.org/10.1016/j.ejpoleco.2006.02.003
  12. Clague, C., Keefer, P., Knack, S., & Olson, M1999). Contract-Intensive Money: Contract Enforcement, Property Rights, and Economic Performance. Journal of Economic Growth, 4(2), 185–211. https://doi.org/10.1023/A:1009854405184
  13. Çetin, M., & Seker, F. (2014). Ticari Açıklık ve Finansal Gelişmenin DYY’ler Üzerindeki Etkisi: OECD Ülkeleri Üzerine Dinamik Panel Veri Analizi. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 24(1), 125–147.
  14. Daude, C., & Stein, E. (2007). The Quality of Institutions and Foreign Direct Investment. Economics and Politics, 19(3), 317–344. https://doi.org/10.1111/j.1468-0343.2007.00318.x
  15. Demirtaş, G., & Akçay, S. (2006). Kurumsal Faktörlerin DYY’ler Üzerine Etkisi: Ampirik Bir Kanıt. Gazi Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 8(2), 15–33.
  16. Düzgün, R. (2008). Doğrudan Yabancı Sermaye Yatırımları ve Yurtiçi Yatırımlar Arasındaki Eşbütünleşme İlişkisi: Türkiye Örneği. 9(1), 187–204.
  17. Freedom House. (2005). Freedom in the World 2005; The Annual Survey of Political Rights & Civil Liberties. In Freedom House.
  18. Fukumi, A., & Nishijima, S. (2010). Institutional Quality and Foreign Direct Investment in Latin America and The Caribbean. Applied Economics, 42(14), 1857–1864. https://doi.org/10.1080/00036840701748979
  19. Globerman, S., & Shapiro, D. (2002). Global foreign direct investment flows: The role of governance infrastructure. World Development, 30(11), 1899–1919. https://doi.org/10.1016/S0305-750X(02)00110-9
  20. Harrison, A., & Revenga, A. (1995). The Effect of Trade Policy Reform: What Do We Really Know? https://doi.org/(DOI): 10.3386/w5225
  21. Hecth, Y., Razin, A., & Shinar, N. G. (2004). Interactions between Capital Inflows and Domestic Investment: Israel and Developing Economies. Israel Economic Review, 2(2), 1–14.
  22. Jadhav, P. (2012). Determinants of foreign direct investment in BRICS economies: Analysis of economic, institutional and political factor. Procedia - Social and Behavioral Sciences, 37, 5–14. https://doi.org/10.1016/j.sbspro.2012.03.270
  23. Karagöz, K. (2007). Türkiye’de Doğrudan Yabancı Yatırım Girişlerini Belirleyen Faktörler:1970-2005. Journal of Yasar University, 2(8), 929–948. https://doi.org/10.1017/CBO9781107415324.004
  24. Karim, Z. A., Zaidi, M. A. S., Ismail, M. A., & Abdul Karim, B. (2012). The Quality of Institutions and Foreign Direct Investment (FDI) in Malaysia. Asian Journal of Accounting and Governance, 3(1), 61–69. https://doi.org/10.17576/ajag-2012-3-6516
  25. Karış, Ç., & Ayla, D. (2018). Türkiye’de DYY’ler ve Ti̇cari̇ Dışa Açıklık İli̇şki̇si̇ni̇n Ekonometri̇k Anali̇zi̇. Bingöl Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 8(16), 255–271. https://doi.org/10.29029/busbed.447782
  26. Kaufmann, D, Kraay, A. & Zoido-Lobaton, P. (1999), “Governance Matters”, Policy Research Working Paper Series 2196, The World Bank.
  27. Kaufmann, D., Kraay, A., & Mastruzzi, M. (2007). Governance Matters VIII Aggregate and Individual Governance Indicators. World Bank Policy Research Working Paper, 4280(June), 1–105. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1424591
  28. Kurul, Z., & Yalta, Y. (2017). Relationship between institutional factors and FDI flows in developing countries: New evidence from dynamic panel estimation. Economies, 5(2). https://doi.org/10.3390/economies5020017
  29. La Porta, R., Lopez-De-Silanes, F., Shleifer, A., & Vishny, R. W. (1997). Legal Determinants of External Finance. Journal of Finance, 52(3), 1131–1150. https://doi.org/10.1111/j.1540-6261.1997.tb02727.x
  30. Lauiter, M., & Moreaub, F. (2012). Domestic Investment and FDI in Developing Countries: The Missing Link. Journal Of Economic Development, 37(3), 1–23.
  31. Liargovas, P. G., & Skandalis, K. S. (2012). Foreign Direct Investment and Trade Openness: The Case of Developing Economies. Social Indicators Research, 106(2), 323–331. https://doi.org/10.1007/s11205-011-9806-9
  32. Masron, T. A., & Abdullah, H. (2010). Institutional Quality as a Determinant for FDI Inflows: Evidence from ASEAN. World Journal of Management, 2(3), 115–128.
  33. Mottaleb, K. A. (2007). Determinants of Foreign Direct Investment and Its Impact on Economic Growth in Developing Countries. In Munich Personal RePEcP Archive (Vol. 9457). https://mpra.ub.uni-muenchen.de/9457/
  34. Nasir, A. (2016). Market Size, Exchange Rate and Trade as a Determinant of FDI the Case of Malaysia. American Journal of Business and Society, 1(4), 227–232.
  35. Ndikumana, L., & Verick, S. (2008). The linkages between FDI and domestic investment: Unravelling the developmental impact of foreign investment in sub-Saharan Africa. Development Policy Review, 26(6), 713–726. https://doi.org/10.1111/j.1467-7679.2008.00430.x
  36. Nonnemberg, M. B., & Cardoso de Mendonça, M. J. (2004). The Determinants of Foreign Direct Investment in Developing Countries. Instituto de Pesquisa Economica Aplicada (IPEA), 061(1), 1–20. file:///D: /Backup/Downloads/Determinants_of_Foreign_Direct_Investmen.pdf
  37. North, D. C. (1993), ‘The New Institutional Economics and Development’. Economic History 9309002, EconWPA.
  38. Omankhanlen, A. E. (2011). The Effect of Exchange Rate and Inflation on Foreign Direct Investment and Its Relationship with Economic Growth in Nigeria. Annals of Dunărea de Jos University. Fascicle I: Economics and Applied Informatics, 1, 5–16.
  39. Özcan, B., & Arı, A. (2010). DYY’lerin Beli̇rleyi̇ci̇leri̇ Üzeri̇ne Bi̇r Anali̇z: OECD Örneği. İstanbul Üniversitesi İktisat Fakültesi Ekonometri ve İstatistik Dergisi, 12, 65–88. https://doi.org/10.20990/kilisiibfakademik.264409
  40. Özşahin, Ş. (2016). Kurumsal Kalite DYY’ler İçin Ne Kadar Önemli? Türkiye Üzerine Ekonometrik Bir Analiz. Journal of Yaşar University, 11(44), 251. https://doi.org/10.19168/jyu.76581
  41. Petrović-Ranđelović, M., Janković-Milić, V., & Kostadinović, I. (2017). Market Size as a Determinant of the Foreign Direct Investment Inflows in the Western Balkans Countries. Facta Universitatis Economics and Organization, 14(2), 93–104. https://doi.org/10.22190/fueo1702093p.
  42. Sachs, J. (2003). Institutions Don‟t Rule: A Refutation of Institutional Fundamentalism. NBER Working Paper No. 9490, Cambridge, MA.
  43. UNCTAD. (2020). World Investment Report 2012: International Production Beyond The Pandemic. www.unctad.org.
  44. Valli, M., & Masih, M. (2014). Is There Any Causality Between Inflation and FDI in an “‘Inflation Targeting’” regime ? Evidence from South Africa. In Munich Personal RePEc Archive (Issue 60246). https://mpra.ub.uni-muenchen.de/60246/1/MPRA_paper_60246.pdf
  45. Younsi, M., & Bechtini, M. (2019). Does good governance matter for FDI? New evidence from emerging countries using a static and dynamic panel gravity model approach. Economics of Transition and Institutional Change, 27(3), 841–860. https://doi.org/10.1111/ecot.12224
  46. World Bank. (2003). World Development Report 2003: Sustainable Development in a Dynamic World--Transforming Institutions, Growth, and Quality of Life. World Bank.