Foreign Direct Investment in Turkey. A regional-level analysis

This study examines the factors that influence foreign direct investment (FDI) in Turkey between 2011 and 2018. It specifically studies how local factors impact the investment decisions of multinational businesses (MNEs) in different locations. The study employs a conditional logit model to assess the influence of population, wages, infrastructure, and organized industrial zones on the attraction of foreign direct investment (FDI). The analysis is based on a dataset consisting of 1,192 investment cases. The study reveals that regions with greater populations and well-developed infrastructures greatly increase their attractiveness to foreign investors. Turkey's lower wages, in comparison to other nations, make it a compelling choice for investments that prioritize cost efficiency. Moreover, the existence of well-structured industrial areas plays a vital role in enticing foreign direct investment (FDI) through the provision of readily available infrastructure and efficient administrative procedures. The results indicate that implementing strategic economic policies focused on improving labor flexibility and infrastructure development, particularly in underdeveloped areas, could increase Turkey's appeal as an investment location. Investors must comprehend regional variances in economic situations to make well-informed decisions. The dissertation asserts that economic and infrastructural elements exert a substantial impact on foreign direct investment (FDI). The study's findings offer valuable guidance to policymakers and corporate leaders in promoting economic growth and enhancing international collaboration. This research also paves the way for more studies on the lasting impacts of these investments and their consequences for regional development. It establishes a basis for future policy and investment plans.