Foreign Direct Investment and Profit Transfers: The Turkish Case

Turkish businessmen, politicians and most academicians tend to see foreign direct investment (FDI) as a remedy for the chronic lack of capital accumulation in Turkey. The meagre FDI inflows which followed the Customs Union Agreement with the European Union, in 1995, created a deep disappointment among these people. Efforts to attract foreign capital have intensified since 2005 and inflows have soared. However, the greater part of the increase is the result of the Turkish government's privatization programme of publicly owned companies, and the acquisition of private firms by large multinational companies, rather than greenfield investments. This research investigates FDI inflows to Turkey and tries to estimate the transfer of profits.