Abstract:

In the study, the example of Turkey, the causal relationship between portfolio investments known as indirect foreign investments and financial development and financial stability was addressed to cover the period 2005-2018. The unit root test test and the stops of the series were studied after the current causality test and the causality relationship between the variables was studied. According to the findings obtained from the study, there is no reasonable relationship between financial stability and portfolio investments, while in some periods from financial development to portfolio investments (third and fourth quarters of 2009, the whole of 2010, the first and third quarters of 2011, the first and third quarters of 2012, the third quarters of 2014, the whole of 2015 and 2016, the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 and the first of 2017 The result is that there is a causal relationship. These findings show that, along with the global financial crisis, portfolio investments are influenced by the concept of financial development. During the last period of the analysis, this cause has disappeared.

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