Foreign Direct Investment and Export Decision Relationship in the Large Turkish Firms

Abstract

Foreign direct investment (FDI) attracts more appeal than ever for Turkey with a high current account deficit. In firm level, incoming FDI has effects on various factors in which we mainly focus on export decision. In this respect, we explore large Turkish firms in order to reveal the relationship between foreign ownership and decision to export. The data of the top 500 Turkish manufacturing firms is gathered from the Istanbul Chamber of Industry for the period of 1993-2009. We have used probit model to analyze the effect of FDI on the export decision with 6842 observations in total. Findings lead us to conclude that high foreign ownership has a positive effect on firm’s decision to export.