Relationship Between Foreign Direct Investment And Terrorism In Turkey: Cointegration And Granger Casuality Analysis

Abstract

This paper investigates the relationship between terrorism and foreign direct investment in Turkey, in the period of 1989-2014 by using time series analysis . For this purposes, firstly the stationary process of variables is examined with Augmented Dickey Fuller (ADF) and Philips Peron (PP) unit root tests and it is found that the variables are stationary at different levels. Furthermore to show long run relationship between variables, ARDL Bounds Test is used and according to results it was determined that there is no cointegration. Moreover Toda Yamamoto Granger Casuality Test is used to confirm casualty between the variables and as a result, there is no casuality relationship is encountered. In the light of existing datas, there is no relationship between terrorism and foreign direct investment in Turkey.