Abstract:

Foreign direct investments being an important part of the international capital movements are evaluated as the investments making in the form of reestablishing a factory in a foreign country, becoming a partner with an existing company or purchasing an established company. Foreign direct investments make a major contribution to economic development in connection with employment, technology, business information, integration with international markets and generating a sound competition environment. In view of the results which foreign direct investments give to national economy; determining the economic factors as to which national economy foreign direct investments would prefer is of great importance in terms of providing foreign capital inflows with continuity. In this regard; the factors determining foreign direct investments are estimated and the relationship between these factors and direct foreign capital inflows is analyzed in this study. As a result of the study; it is seen that gross domestic product (GDP), trade openness, unit labor cost and inflation are the economic determinants of foreign direct investments. Separately it is concluded that GDP, trade openness and unit labor cost have a positive effect on foreign direct investments and that there is negative relationship between inflation and foreign direct investments.

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