Determinants of Economic Growth: Bounds Testing Approach

In this study, the effects of foreign direct investments and exports on Turkey’s economic growth are analyzed via bounds testing approach by using 1992:Q1- 2012:Q3 period data. According to empirical findings, series were found to be cointegrated. In the long and short run analysis, the effect of export on the economic growth is statistically significant; however effect of foreign direct investment on the economic growth is positive but statistically insignificant. The model’s error correction mechanism has been worked.