The distribution and determinants of Turkey’s FDI positions in Africa

Abstract

This study investigates the key determinants of Turkey's FDI positions in Africa by employing the gravity model.The major objective is to identify the core macroeconomic, socio-cultural, political, and governance-related determinants.PMLE is used in order to efficiently test the impact of dummy variables.Besides, three different models are estimated -the whole Africa, SSA and North African countries to investigate the variations in the FDI factors within the continent.The results illustrate that GDP size, per capita income, improvement in economic freedom and corruption levels, sharing common religion, improvement in easiness of doing businesses, and better political stability are attracting FDI from Turkey to Africa in general and SSA in particular.In the North African region, the FDI positions of Turkey are increasing in parallel to the GDP growth of Turkey, its import volume and the macroeconomic conditions of the hosting economiesh.