Özet:

This study questioned the causality relationship between capital flow and economic growth for Turkey using different capital flow variables and current econometric methods. The forecasts are made using direct foreign investments and portfolio investments data covering the period from 1974 to 2016 and the asymmetric causality test of Hatemi-J (2012) and the asymmetric effect response functions of Hatemi-J (2014). These methods indicate that when the shocks of the variables are divided positively and negatively, the relationship between the variables can also differ. The findings of the study show that there is no cause for either positive shocks or negative shocks directly from foreign investment input and output variables to economic growth. However, from economic growth directly to foreign investment input and output variables the causality relationship for positive shocks cannot be identified while the existence of causality for negative shocks is concerned. Therefore, economic growth is the cause of foreign direct investment movements; but the result is that this causal relationship is asymmetric. From portfolio investments to economic growth and portfolio investments to economic growth, there is no causal relationship in both types of shock.

Özet:

This study investigates the causal relationship between capital flows and economic growth for Turkey using different capital flows indicators and current econometric methods. Estimates were made using foreign direct investment (FDI) and portfolio investment data covering the years between 1974-2016 for Turkey. In addition, Hatemi-J (2012) causality test and Hatemi-J (2014) asymmetric impulse and response functions were used empirical analysis. These methods indicate that the causality relationship between the variables can be different if the shocks are separated into positive and negative. The findings of the study show that there is no causality in both positive and negative shocks from direct foreign investment inflow and outflow variables to economic growth. While the causality relationship for positive shocks from economic growth to foreign direct investment input and output variables cannot be determined, there is a causality for negative shocks. Thus, it is concluded that economic growth is the cause of foreign direct investments but this relationship is asymmetric. There is no causal relationship from portfolio investments to economic growth and from economic growth to portfolio investments in both types of shock.

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