Determinants of Domestic Investment in Turkey: An Econometric Study for the Period 1970-2011


The study examines the obstacles facing most developing countries that prevent making any right investment decision as they suffer from limited local and foreign financial resources and led to determine interest rates ,economic instability and political obstruction lead to achieve stable economic growth . Our goal is to discuss the combined effects of a number of financial factors and the real and the financial internal and external markets that impede rates of domestic investment in Turkey for the period 1970-2011 using the technique of (VAR) to measure the determinants in the long-term and random error correction model of (ECM) to measure the effects in the short term , in addition to knowing the trends of the causal relation between them using the causality of (Kranger) . Of the most important findings of the research is that there is a positive relation between economic growth and domestic savings and government spending and rates of stable prices, foreign direct investment on domestic investment in the long term and that the causal relation has supported this trend .