Crises, portfolio flows, and foreign direct investment: An application to Turkey (original) (raw)
AI-generated Abstract
This paper analyzes the impact of financial and economic crises on the relationship between capital flow components and their determinants within the context of an emerging economy, specifically Turkey. It highlights that crises influence the volatility of portfolio flows and foreign direct investment (FDI), emphasizing the different sensitivities of these flows to domestic and international shocks. The study employs endogenous break modeling to enhance the accuracy of parameter estimation and demonstrates that a failure to consider these breaks can lead to misleading conclusions regarding the determinants of international investments.
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