International Business Dissertation/Project (MAIB)

Chapter 5 consists of empirical analysis, presenting the data, analyzing it and discussing the growth of FDI as contributed by implementation of governmental policies in the Istanbul region and its impact on tourism. Chapter 6 concludes the study. 9
FDI has been found to be an important aspect of economic growth. an underpinning generates financial inflows that aid in shoring up aspects of both developed and developing economies (De Soysa, 2003, p. 40). Dunning and Naurla (1996, p. 1) tell us “The notion that the outward and inward direct investment position of a country is systematically related to its economic development, relative to the rest of the world …”. Foreign Direct Investment (FDI) represents investment inflows on an economic level that encompasses a broad cross section of industries. This study shall narrow down that range to one sector, tourism, to seek to understand the impact of FDI in this segment with regard to Turkey for the period 2000 through 2008 in Istanbul.
Legislation and political changes in the country in 2001 that shall be delineated in later segments of this study have resulted in a significant upswing in FDI inflows for the period indicated. The foregoing, along with transaction cost benefits as represented by low labour costs, the positioning of the country as a gateway to the west, and the advantages of shipping finished goods back to Europe were also important factors that aided in FDI inflows. As shall be shown herein, increased FDI investment in manufacturing, technology and other areas has primarily been concentrated in Istanbul, which has received the lion’s share of FDI firms at 63.3%, representing $19,892,086,507 in capital (Berkoz and Turk, 2004). With respect to tourism, Istanbul has always been a preferred location in Turkey, and that appeal has been enhanced as a result of increased FDI. Overall that resulted in more business being conducted