Reflections of Geopolitical Risk on Foreign Direct Investments: The Case of Türkiye

Ali Altıner; Eda Bozkurt

Makale detayları

Reflections of Geopolitical Risk on Foreign Direct Investments: The Case of Türkiye

Yazarlar:

Ali Altıner | Eda Bozkurt

Yayıncı:

Mustafa Süleyman ÖZCAN

Ana Başlıklar:

Ekonomi

Dergi:

İnsan ve Toplum Bilimleri Araştırmaları Dergisi Vol.12 Issue 3, pp.1292-1309

Belge Tipi:

Makale

Yayın Tarihi:

9/2023

Belge Dili:

İngilizce

Document ID (Org No.):

2001298093

pISSN:

2147-1185

Anahtar kelimeler:

Özet:

 A way to achieve sustainable economic growth in developing countries is to increase investments with domestic savings. However, not every country has an equal opportunity in terms of domestic savings. The desired level of investment expenditures cannot be reached in countries with a savings gap. In this case, foreign direct investment FDI becomes more valuable in meeting countries investment needs. Nevertheless, companies may not behave very bravely in their investment actions in other countries. There is a considerable risk and uncertainty avoidance in the nature of investment because uncertainty and risk are accepted as harbingers of instability for a country. Since the main goal of companies is to make a profit, they may start thinking that they will not have the opportunity to make a profit in an unstable economy. Hence, the risk perception in the investment environment must be low for developing countries to become attractive for FDI inflows. Geopolitical risks, as well as economic, political, and strategic risks that countries will be exposed to, are important indicators considered in FDI inflows. Literature research shows that investors are aggressive in investing with a profit appetite and, with exceptions, are sensitive to geopolitical risks. In other words, FDI decreases in countries where geopolitical risks tend to increase. The present study tested the validity of this assumption in the literature for Türkiye. The impact of geopolitical risks on FDI was analyzed with the ARDL Boundary Test Approach for the period 1985-2020. FDI inflows were used as the dependent variable, and the Geopolitical Risk GPR Index, a measure of geopolitical risk, was used as the independent variable. Moreover, growth, globalization, and inflation are the other independent variables analyzed. The test results demonstrated the negative effect of the increase in the GPR index on FDI inflows. In terms of the results obtained, the study provides an important perspective on the prioritization of the geopolitical risk factor in the evaluation of foreign investment performance.

 A way to achieve sustainable economic growth in developing countries is to increase investments with domestic savings. However, not every country has an equal opportunity in terms of domestic savings. The desired level of investment expenditures cannot be reached in countries with a savings gap. In this case, foreign direct investment FDI becomes more valuable in meeting countries investment needs. Nevertheless, companies may not behave very bravely in their investment actions in other countries. There is a considerable risk and uncertainty avoidance in the nature of investment because uncertainty and risk are accepted as harbingers of instability for a country. Since the main goal of companies is to make a profit, they may start thinking that they will not have the opportunity to make a profit in an unstable economy. Hence, the risk perception in the investment environment must be low for developing countries to become attractive for FDI inflows. Geopolitical risks, as well as economic, political, and strategic risks that countries will be exposed to, are important indicators considered in FDI inflows. Literature research shows that investors are aggressive in investing with a profit appetite and, with exceptions, are sensitive to geopolitical risks. In other words, FDI decreases in countries where geopolitical risks tend to increase. The present study tested the validity of this assumption in the literature for Türkiye. The impact of geopolitical risks on FDI was analyzed with the ARDL Boundary Test Approach for the period 1985-2020. FDI inflows were used as the dependent variable, and the Geopolitical Risk GPR Index, a measure of geopolitical risk, was used as the independent variable. Moreover, growth, globalization, and inflation are the other independent variables analyzed. The test results demonstrated the negative effect of the increase in the GPR index on FDI inflows. In terms of the results obtained, the study provides an important perspective on the prioritization of the geopolitical risk factor in the evaluation of foreign investment performance.

 A way to achieve sustainable economic growth in developing countries is to increase investments with domestic savings. However, not every country has an equal opportunity in terms of domestic savings. The desired level of investment expenditures cannot be reached in countries with a savings gap. In this case, foreign direct investment FDI becomes more valuable in meeting countries investment needs. Nevertheless, companies may not behave very bravely in their investment actions in other countries. There is a considerable risk and uncertainty avoidance in the nature of investment because uncertainty and risk are accepted as harbingers of instability for a country. Since the main goal of companies is to make a profit, they may start thinking that they will not have the opportunity to make a profit in an unstable economy. Hence, the risk perception in the investment environment must be low for developing countries to become attractive for FDI inflows. Geopolitical risks, as well as economic, political, and strategic risks that countries will be exposed to, are important indicators considered in FDI inflows. Literature research shows that investors are aggressive in investing with a profit appetite and, with exceptions, are sensitive to geopolitical risks. In other words, FDI decreases in countries where geopolitical risks tend to increase. The present study tested the validity of this assumption in the literature for Türkiye. The impact of geopolitical risks on FDI was analyzed with the ARDL Boundary Test Approach for the period 1985-2020. FDI inflows were used as the dependent variable, and the Geopolitical Risk GPR Index, a measure of geopolitical risk, was used as the independent variable. Moreover, growth, globalization, and inflation are the other independent variables analyzed. The test results demonstrated the negative effect of the increase in the GPR index on FDI inflows. In terms of the results obtained, the study provides an important perspective on the prioritization of the geopolitical risk factor in the evaluation of foreign investment performance.

 Gelişmekte olan ülkelerde sürdürülebilir iktisadi büyümeyi sağlamanın bir yolu yurtiçi tasarruflarla yatırımları artırmaktır. Fakat her ülke yurtiçi tasarruflar açısından eşit şansa sahip değildir. Tasarruf açığı olan ülkelerde özel yatırım harcamaları istenilen düzeye ulaşamamaktadır. Bu durumda ülkelerin yatırım ihtiyacını karşılamada doğrudan yabancı sermaye yatırımları FDI daha kıymetli hale gelmektedir. Fakat firmalar başka ülkelere yatırım aksiyonlarında çok cesur davranamayabilirler. Yatırımın doğasında önemli ölçüde risk ve belirsizlikten kaçınma bulunmaktadır. Çünkü belirsizlik ve risk bir ülke için istikrarsızlığın habercisi olarak kabul edilmektedir. Firmaların ana amacı kar elde etmek olduğundan, istikrarsız bir ekonomide kar elde etme olanaklarının olmayacağı fikrine kapılabilirler. Bu sebeple gelişmekte olan ülkelerin, FDI girişleri için çekici hale gelmelerinde yatırım ortamında risk algısının düşük olması gerekmektedir. Ülkelerin maruz kalacağı ekonomik, politik ve stratejik riskler kadar jeopolitik riskler de FDI girişlerinde dikkate alınan önemli bir göstergedir. Literatür araştırmaları kar iştahıyla yatırım yapma konusunda agresif ve istisna olanlar dışında yatırımcıların jeopolitik risklere duyarlı olduğunu göstermektedir. Yani jeopolitik risklerin artış eğilimi gösterdiği ülkelerde FDI azalmaktadır. Bu çalışmada literatürdeki bu varsayımın Türkiye açısından geçerliliği test edilmiştir. Jeopolitik risklerin FDI üzerindeki etkisi 1985-2020 dönemi için ARDL Sınır Testi Yaklaşımı ile analiz edilmiştir. Bağımlı değişken olarak FDI girişleri, bağımsız değişken olarak jeopolitik riskin bir ölçüsü olan Jeopolitik Risk GPR endeksi kullanılmıştır. Ayrıca büyüme, küreselleşme ve enflasyon analiz edilen diğer bağımsız değişkenlerdir. Test sonuçları, GPR endeksindeki yükselişin FDI girişleri üzerinde negatif etkili olduğunu göstermiştir. Çalışma elde edilen sonuçlar itibariyle, yabancı yatırım performansının değerlendirilmesinde jeopolitik risk faktörünün önceliklendirilmesi hususunda önemli bir bakış açısı sunmaktadır.

Makale detayları

Reflections of Geopolitical Risk on Foreign Direct Investments: The Case of Türkiye

Yazarlar:

Ali Altıner | Eda Bozkurt

Yayıncı:

Mustafa Süleyman ÖZCAN

Ana Başlıklar:

Ekonomi

Dergi:

İnsan ve Toplum Bilimleri Araştırmaları Dergisi Vol.12 Issue 3, pp.1292-1309

Belge Tipi:

Makale

Yayın Tarihi:

9/2023

Belge Dili:

İngilizce

Document ID (Org No.):

2001298093

pISSN:

2147-1185

ARDL Boundary Test

Foreign Direct Investment

Economic Growth

Geopolitical RiskARDL Sınır Testi

Doğrudan Yabancı Sermaye Yatırımları

Ekonomik Büyüme

Jeopolitik Risk

Sayı

Makale detayları

Yazarlar: Ali Altıner | Eda Bozkurt

Yayıncı: Mustafa Süleyman ÖZCAN

Ana Başlıklar: Ekonomi

Dergi: İnsan ve Toplum Bilimleri Araştırmaları Dergisi Vol.12 Issue 3, pp.1292-1309

Belge Tipi: Makale

Yayın Tarihi: 9/2023

Belge Dili: İngilizce

Document ID (Org No.): 2001298093

pISSN: 2147-1185

Sayı

Yazarlar:

Ali Altıner | Eda Bozkurt

Yayıncı:

Mustafa Süleyman ÖZCAN

Ana Başlıklar:

Ekonomi

Dergi:

İnsan ve Toplum Bilimleri Araştırmaları Dergisi Vol.12 Issue 3, pp.1292-1309

Belge Tipi:

Makale

Yayın Tarihi:

9/2023

Belge Dili:

İngilizce

Document ID (Org No.):

2001298093

pISSN:

2147-1185