Transport Infrastructure and The Geography of Foreign Direct Investments in Turkey

This essay describes the impact of transport infrastructure and services on foreign direct investment (FDI) in Turkey. The authors examine how individual transport modes contribute to the FDI location decisions in 74 Turkish provinces. They use three-stage least squares methodology for estimation and focus on four transport-related explanatory variables: air traffic, port (shipping) traffic, road density, and rail density. They report that, based on data from 2000-2010, provinces with more air traffic and a denser road network tend to attract more foreign investment. The adopted scenario analyses suggest that, holding other variables constant, a 10% increase in both air traffic and road network density is likely to attract almost 291 new FDI projects and $4,441 million of FDI stock and create around 33,173 new FDI jobs throughout this 10-year period. The authors used real-world, historical data for traffic volumes for air and maritime transport (rather than dummy variables) to better reflect their economic impact. They conclude with a brief discussion of the lack of influence of port traffic and rail density.


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  • Accession Number: 01691119
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jan 20 2019 7:53PM