THE EFFECTS OF FOREIGN DIRECT INVESTMENTS ON THE ECONOMIC PERFORMANCE: A HISTORICAL ANALYSIS ON THE MINT COUNTRIES

The aim of this study is to investigate the effects of foreign direct investments on the economic growth of countries. MINT countries (Mexico, Indonesia, Nigeria and Turkey) are selected in order to achieve this objective of the study. Foreign direct investments are especially important for the economies of developing countries. These countries have aimed to increase investments in order to reach the status of developed countries. Pedroni cointegration analysis was used in the analysis process. Furthermore, it is aimed to make a historical analysis by using the annual data in the period between 1974 and 2017. Due to the long period interval, a historical analysis is possible. Therefore, it is possible to mention two different specificities of this study. First, the analysis is a guide for the development of MINT countries. On the other hand, Pedroni panel cointegration analysis is considered for the first time under this topic. The main reason for the selection of MINT countries is that although the countries concerned are in the group of developing countries, there is a potential for growth especially due to their geographical location. As a result, it was concluded that there is a long-term relationship between direct foreign investments and economic growth for the MINT countries. Therefore, it would be appropriate for governments in MINT countries to provide incentives such as tax reduction and location support to increase foreign direct investment. This will help the countries in question to reach the developed country level.

Keywords

foreign direct investment, economic growth, economic history, pedroni panel cointegration analysis