Economic Freedom, Foreign Direct Investment and Domestic Investment Expenditures in Turkey

In this study, the long run relationships between economic freedom, foreign direct investments and domestic investment expenditures in Turkey were explored for the period 1995–2015 by using the autoregressive distributed lag (ARDL) model. The ARDL cointegration test presents that there is an evidence of the long-run relationship between variables. The overall results from the estimated long run coefficients indicate that; i) There isn’t any statistically significant relationship between foreign direct investments and domestic investment expenditures. ii) Per capita real income and the economic freedom have positive effect on domestic investment expenditures