Middle East Technical University

WORKING PAPER NO. 02/2010

THE EFFECT OF FOREIGN DIRECT INVESTMENT

IN TURKEY
ON
EXPORT PERFORMANCE

Ahu Perşembe
Department of Economics, Middle East Technical University, Ankara, Turkey
 Life is what happens to you while you are busy making other plans.
John LENNON

ABSTRACT

This paper investigates the relationship between mainly FDI, exports, imports, and exchange rate with Turkey's
monthly data for the period 1998-2008. It focuses on the linkage between exports and FDI, constructing
econometric models step by step. The empirical methodology makes use of time series analysis as Granger
causality, and cointegration tests. In this respect, a common model is focused with exports ( dependent variable),
FDI and exchange rate ( explanatory). Then, the correlation matrix of these variables is studied to observe their
relations with each other. Taking into consideration of imports, net exports ( X-M ) is regressed on FDI to see
the relation of trade balance with foreign direct investment. After taking a look at these main models, Granger
causality test is performed to claim whether export and FDI are affected by each other ( two ways), or at least
one causes other to change over months (one way ). Next, the effect of exchange rate on exports, and FDI is
eliminated. For this aim, two models are observed in which exchange rate is regressed on both export and FDI
seperately. In other words, residuals of the models would imply the removal of exchange rate effect from FDI
and exports. As done before, Granger causality test is analysed for these two variables out of exchange rate
effect. Finally, time series analysis takes place to realise the possible short run and long run relation between
export, exchange rate and FDI. Our results suggest that FDI is a significant vehicle and has the effect of
increasing exports in the host country, Turkey. The findings support the widely held view that the increased
levels of FDI positively affects the export performance.
1- Introduction

The present study chooses to fill the gap by investigating the issue with monthly data for the
sample period of 1998-2008. This paper intends to carry out an econometric analysis to
investigate interlinkages between the two variables. Although FDI has been the primary
mechanism linking countries’ economies, the issues of what FDI means for trade are of
particular interest in the context of policies for trade and FDI. Therefore, the motivation of
this current study is to empirically investigate the causal relationship between export and FDI
inflows by means of the Granger causality test in the cointegration model framework for
monthly data from 1998 to 2008. In the case of Turkey, the government opted for more liberal
policies favoring the private sector especially foreign direct investment participation after the
ending period of 1980s. Responding to this swift change of policies, the domestic private
sector has received an aggressive inflow of FDI to ensure the sustained expansion in output
growth. Moreover, since its adoption of the policy adjustment and liberalization in the end of
1980s, Turkey’s external trade has expanded at even higher rates. Since FDI and trade are
important for growth and development, it is important to understand the interlinkages between
the two. The relationship between FDI inflows and exports in relation to economic
performance has been broadly accepted; however, the empirical work on the relationship is
relatively limited. Survey and empirical results are usually uncertain, which necessitates a
formal testing. Most of the existing research stresses complementarity and substitutability
relationships between exports and FDI. However, many of these studies do not discuss the
issue of causality between inflows of FDI and exports. For this reason, this paper aims to
examine this possible relation, adding imports and exchange rate affects. The study is
organised as follows. In section 2, a literature review of a sample of both theoretical and
empirical studies is performed. The econometric methodology is presented with the
description of the data follows in Section 3 . The empirical results are shown in section 4.
Finally, Section 5 concludes.

2- Literature Review
Borensztein et al. (1995) study the role of foreign direct investment (FDI) on the economic
development in the developing countries through the channel, technology diffusion.
According to them, being the significant factor of the long-term growth rate of income, the
rate of technological progress in the host countries are related with FDI through a '' contagion''
effect from more advanced technology and management practices used by foreign firms and
multinational corporations (MNCs). In the article, they claimed that the international
diffusion of technology can be caught up by imports of high-technology products, adoption of
foreign technology and acquisition of human capital through various means. Yet, the most
important channel is the FDI by MNCs since multinational corporations coming from
industrialized countries have more advanced ''knowledge'', that gives them the advantage to
introduce new capital with lower costs, which is considered to be a positive sign for economic
growth. In the paper, they also examine empirically the role of the level of the human capital
in the host economy by utilizing data on FDI flows from industrial countries to 69 developing
countries over the last two decades because their model suggests the empirical analysis of the
complementarity between FDI and human capital in the process of productivity growth. In
addition, they test the effect of FDI on domestic investment whether the foreign investment
has a crowding out effect on domestic investment (DI) and on the efficiency of investment. In
the empirical investigation, they use panel data for the two decades 1970-79 and 1980-89 and
the sample consists of 69 developing countries. The most robust finding of the regression
results is that more advanced technologies require the presence of a sufficient level of human
capital in the host country. For example, FDI made in Turkey and Egypt have different effects
of economic development because they have different levels of absorptive capability for
advanced technology (Wikipedia, 2009). The main regression results show that there is a
positive overall effect of FDI on economic growth however the magnitude of the effect
depends on the level of educational attainment in the host country. The second interesting
result, although not strong, FDI has a positive effect on domestic investment, meaning that
FDI is complementary to domestic investment and the less robust relationship comes from
again the differences of technological nature between FDI and DI.

The second article we consider while reviewing the literature examines and tests the role of
FDI in again economic development however from a newly industrializing economy's
perspective in terms of the dual role of FDI. Shujie and Kailei (2007) investigate whether FDI
is a mover of production efficiency or a shifter of production frontier. In this paper, China is
chosen to test the hypotheses due to its fast economic success over the past decades. Yao and
Wei differentiate FDI and domestic investment (DI). According to them, FDI accelerates the
speed of adoption of general-purpose technologies (GPT), provides new technology and
knowhow in the host countries. GPT is able to increase productivity of labor and capital, but
it takes significant time for all countries to reach their potentials. Although export is vital for
increasing countries’ productions and making allocation more efficient, it may not shift
countries’ production frontiers. Similarly, FDI is a significant component for raising
countries’ production frontiers by bringing them advance managerial and organizational
skills. FDI compensates the lack of domestic capital inside the country and thus can be
regarded as a mover of economic growth. Yao and Wei use Cobb-Douglas production
function with labor, capital and other environmental variables and adjust FDI into this
function along with export, human capital, transportation and real exchange rate in order to
test whether FDI grants to shift production possibility frontier. According to the data set they
used, FDI contributes 30 % of total Chinese technological progress and % 5 of total
investment. Its contribution to gross technological progress proves that FDI is at the same
time a shifter of production possibility frontier.
Thirdly, Zhang and Song (2003) examined Chinese economy’s manufacturing export
performance at the province level after China experienced a regime change and open her
doors to the foreign direct investment (FDI) in late 1970s. By performing a deep analysis of
rapid growth of FDI and total exports in China through the years 1979 - 1999 in the light of
exports generated by foreign-invested enterprises (FIEs) and the share of exports by FIEs in
total exports, the paper focused on significant affects of exports conducted by foreign
affiliates in China. Zhang and Song point out that export processing in China has grown
rapidly due to the rapid growth of FIEs and the value of exports by foreign affiliates
constituted 44 % of China’s total exports in 1998. According to them, this sharp rise of
exports by FIEs can be attributed to China’s export promotion regime in which FIEs were
subjected to different set of regulations from most domestic enterprises. Furthermore, in their
paper, Zhang and Song studied provincial differences regarding to the distributions of export
and FDI, and reached a conclusion that the coastal areas had more than % 85 of all China’s
export with again more than 85 % of the total inward FDI. By conducting panel data analysis
on the data set covering 24 provinces in the period of 1986 - 1997, Zhang and Song reached a
common belief that FDI triggers provincial manufacturing export performance. According to
Zhang and Song, multinational corporations (MNCs) help domestic enterprises in order to be
more competitive in the world market by bringing them a new technology and opportunity of
a strong link with global marketing networks. Local firms also attain the possibility of
imitating MNCs’ transportation, communication and financial services systems to support
their activities. MNCs’ remarkable improvements to promote exports on Chinese provinces’
market strategies, methods, procedures and channels of distribution with undeniable supports
of Chinese government provide an inevitable continuum for substantial increase in FDIs in
China.
Finally, Basu et al (2003) investigated not only the effect of FDI on growth as great deal of
academics did before but also the transitional effects of FDI on growth by using a panel data
cointegration framework on the data set of 23 developing countries. In addition, they
examined the impact of liberalization on the FDI – growth relationship they considered.
According to Basu, Chakraborty and Reagle, the bilateral relationship between FDI and
growth comes from a promotion of increased FDI on growth in host countries and an
investors’ interest to make investment into the countries exhibits high growth performance.
They tried to examine both long-term and short-term two-way relationship between FDI and
growth by developing a cointegrated relationship between them and whether this relationship
change as countries undergo a process of liberalization. According to 23 developing
countries’ data set covering the period of 1978 – 1996, Basu, Chakraborty and Reagle
conclude that for open economies the causality is bidirectional between FDI and growth in
both the short-run and the long run; whereas for closed economies even though the short-run
causality of the relationship is again bidirectional, in the long run the causality is mainly runs
from growth to FDI. This reverse long-run effect of growth on FDI stems from bilateral trade.
The greater deal of bilateral trade occurs between two countries, the more information for the
home country about the investment climate in the host country. Thus, by this way the home
country increases her permanent investments on the host country.
In the light of the literature summarized above, we aim to examine empirically the role of FDI
on export performance for the case of Turkey.

3- Data and Methodology

We have seen that many researchers used time series data when we reviewed researches
that have been done before. So, we think that time series dataset would provide comparable
and consistent measurement of how the variables change through time. Hence, we decided to
use time-series dataset because it would be more suitable than others due to our research topic
which is related with time. We have chosen our data for Turkey from the Central Bank of
Turkish Republic website and Turkish Statistical Institute because it is reliable and correct
measurement. Our dataset contains “X” (export) in nominal term, “e” (exchange rate) in
nominal term and “FDI” (Foreign Direct Investment). We have selected data range between
1998 and 2008 monthly. After collecting our dataset, we formed export demand function
which is determined by foreign direct investment and exchange rate. Therefore the following
linear model is adopted:
Xt=  0 + 1 FDI t +  2 et + u t

Where X is the aggregate export in nominal term; FDI is the nominal foreign direct
investment in USA dollar, e is the nominal exchange rate index. We have expected that 1

and  2 are greater than zero. It is often argued that successful FDI-promoting policies should
lead to, among other things, a significant increase in the host country's exports. Furthermore,
when nominal exchange rate level increases or TL depreciates, economic units demand and
consume more of Turkish goods and services.

4- Empirical Results

We have formed our model as a nominal term due to theoritical assumption. It is the best and
more suitable form to observe changes in export demand with respect to foreign direct
investment and nominal effective exchange rate.

Dependent Variable: X
Method: Least Squares
Date: 02/03/10 Time: 01:10
Sample: 1998M01 2008M12
Included observations: 132

Variable Coefficient Std. Error t-Statistic Prob.

C 2046.276 419.7664 4.874798 0.0000

FDI 1.223397 0.189408 6.459069 0.0000
E 2066.779 366.0695 5.645867 0.0000

R-squared 0.436253 Mean dependent var 4980.753

Adjusted R-squared 0.427513 S.D. dependent var 2968.797
S.E. of regression 2246.278 Akaike info criterion 18.29440
Sum squared resid 6.51E+08 Schwarz criterion 18.35992
Log likelihood -1204.431 F-statistic 49.91303
Durbin-Watson stat 0.673464 Prob(F-statistic) 0.000000

As we see from above table, the coefficients of our model are jointly and individually
significant because t-ratios and F-statistic are enough high to reject the null hypothesis. R-
square of our estimated model is fairly good. We choose our model as linear because the
some value of exchange rate is almost equal to zero so we could not use the logarithmic form
to estimate demand for export. Furthermore, our estimated model fits the economics approach
to demand for export since we expect a positive relationship between export and exchange
rate as it is revealed in our regression results.

Moreover, the positive relationships FDI, exports and exchange rate are resulted from the
correlation matrix and the graph below, which is consistent with the results of the model
estimated and economic approach.

FDI X E
FDI 1.000000 0.544933 0.264148
X 0.544933 1.000000 0.503918
E 0.264148 0.503918 1.000000

14000

12000

10000

8000

6000

4000

2000

-2000
98 99 00 01 02 03 04 05 06 07 08

FDI X
Dependent Variable: X-M
Method: Least Squares
Date: 02/03/10 Time: 01:30
Sample: 1998M01 2008M12
Included observations: 132

Variable Coefficient Std. Error t-Statistic Prob.

C -1591.015 270.0121 -5.892383 0.0000

FDI -0.898982 0.121835 -7.378665 0.0000
E -633.5794 235.4719 -2.690679 0.0081

R-squared 0.375564 Mean dependent var -2817.008

Adjusted R-squared 0.365883 S.D. dependent var 1814.490
S.E. of regression 1444.904 Akaike info criterion 17.41194
Sum squared resid 2.69E+08 Schwarz criterion 17.47746
Log likelihood -1146.188 F-statistic 38.79329
Durbin-Watson stat 0.681330 Prob(F-statistic) 0.000000

Then, as you see from above table, we make a regression which is foreign direct investment
and exchange rate on net export. The result shows us that although exchange rate is
depreciated, net export decreases instead of increasing which is not expected in terms of
Marshall-Lerner condition. We think that the reason of this result would be high marginal
propensity to consume of Turkey, increasing imports when economic growth policies take
place like export-led strategies as mentioned in the paper of Kepenek(2007).

Pairwise Granger Causality Tests

Date: 02/03/10 Time: 01:31
Sample: 1998M01 2008M12
Lags: 1

Null Hypothesis: Obs F-Statistic Probability

X does not Granger Cause FDI 131 39.9262 4.0E-09

FDI does not Granger Cause X 10.5457 0.00149

Then we apply the Granger-Causality test to observe which variable effect the other variable.
As we see from above table, according one lag test, the result shows us that there is bilateral
relation between export and foreign direct investment.

Dependent Variable: X
Method: Least Squares
Date: 02/03/10 Time: 01:20
Sample: 1998M01 2008M12
Included observations: 132

Variable Coefficient Std. Error t-Statistic Prob.

C 2151.995 480.6702 4.477072 0.0000

E 2691.349 404.6017 6.651848 0.0000

R-squared 0.253933 Mean dependent var 4980.753

Adjusted R-squared 0.248194 S.D. dependent var 2968.797
S.E. of regression 2574.148 Akaike info criterion 18.55946
Sum squared resid 8.61E+08 Schwarz criterion 18.60314
Log likelihood -1222.924 F-statistic 44.24708
Durbin-Watson stat 0.093918 Prob(F-statistic) 0.000000

Then, we regress exchange rate on export to eliminate the effects of exchange rate on exports
as the results are shown above. The same process are applied to FDI series as illustrated
below.

Dependent Variable: FDI

Method: Least Squares
Date: 02/03/10 Time: 01:20
Sample: 1998M01 2008M12
Included observations: 132

Variable Coefficient Std. Error t-Statistic Prob.

C 86.41432 194.2263 0.444916 0.6571

E 510.5207 163.4890 3.122660 0.0022

R-squared 0.069774 Mean dependent var 623.0000

Adjusted R-squared 0.062619 S.D. dependent var 1074.326
S.E. of regression 1040.146 Akaike info criterion 16.74715
Sum squared resid 1.41E+08 Schwarz criterion 16.79082
Log likelihood -1103.312 F-statistic 9.751008
Durbin-Watson stat 1.392392 Prob(F-statistic) 0.002210

Hence, we find the net effect of FDI on Exports by estimating the model below. As a result,
we observe that the coefficient of FDI in this model is the same of the previous model
including Exchange rate as an independent variable.
Dependent Variable: XRESID03
Method: Least Squares
Date: 02/03/10 Time: 01:21
Sample: 1998M01 2008M12
Included observations: 132

Variable Coefficient Std. Error t-Statistic Prob.

C 2.41E-13 194.7600 1.24E-15 1.0000

FRESID03 1.223397 0.188678 6.484056 0.0000

R-squared 0.244375 Mean dependent var 2.50E-13

Adjusted R-squared 0.238562 S.D. dependent var 2564.304
S.E. of regression 2237.622 Akaike info criterion 18.27925
Sum squared resid 6.51E+08 Schwarz criterion 18.32293
Log likelihood -1204.431 F-statistic 42.04299
Durbin-Watson stat 0.673464 Prob(F-statistic) 0.000000

Then we apply the Granger-Causality test to observe which variable effect the other variable.
As we see from the table below, according to one lag test, the result shows us that there is a
bilateral relation between export and foreign direct investment variables which are excluded
from the effect of exchange rate.

Pairwise Granger Causality Tests

Date: 02/03/10 Time: 01:35
Sample: 1998M01 2008M12
Lags: 1

Null Hypothesis: Obs F-Statistic Probability

FRESID03 does not Granger Cause

XRESID03 131 7.68212 0.00641
XRESID03 does not Granger Cause FRESID03 34.2228 3.9E-08

Finally, we would make time series analysis to check spurious problem. First, we should look
stationarity of our time series by using unit root test by using Dickey-Fuller.

Null Hypothesis: FDI has a unit root

Exogenous: Constant, Linear Trend
Lag Length: 0 (Fixed)

t-Statistic Prob.*

Augmented Dickey-Fuller test statistic -10.47807 0.0000

Test critical values: 1% level -4.029595
5% level -3.444487
10% level -3.147063

*MacKinnon (1996) one-sided p-values.

Augmented Dickey-Fuller Test Equation

Dependent Variable: D(FDI)
Method: Least Squares
Date: 02/10/10 Time: 01:36
Sample (adjusted): 1998M02 2008M12
Included observations: 131 after adjustments

Variable Coefficient Std. Error t-Statistic Prob.

FDI(-1) -0.923273 0.088115 -10.47807 0.0000

C -367.6016 163.0950 -2.253912 0.0259
@TREND(1998M01) 14.36068 2.499852 5.744610 0.0000

R-squared 0.461710 Mean dependent var 9.549618

Adjusted R-squared 0.453299 S.D. dependent var 1224.308
S.E. of regression 905.2440 Akaike info criterion 16.47692
Sum squared resid 1.05E+08 Schwarz criterion 16.54276
Log likelihood -1076.238 F-statistic 54.89498
Durbin-Watson stat 2.011165 Prob(F-statistic) 0.000000

As we see from the table above, tau statistic of foreign direct investment is higher than the
table value at the 5% significance level. So we could reject the null hypothesis that foreign
direct investment series is non-stationary. Thus, our FDI series is stationary.

Null Hypothesis: X has a unit root

Exogenous: Constant, Linear Trend
Lag Length: 0 (Fixed)

t-Statistic Prob.*

Augmented Dickey-Fuller test statistic -3.818824 0.0185

Test critical values: 1% level -4.029595
5% level -3.444487
10% level -3.147063

*MacKinnon (1996) one-sided p-values.

Augmented Dickey-Fuller Test Equation

Dependent Variable: D(X)
Method: Least Squares
Date: 02/10/10 Time: 01:37
Sample (adjusted): 1998M02 2008M12
Included observations: 131 after adjustments

Variable Coefficient Std. Error t-Statistic Prob.

X(-1) -0.205092 0.053706 -3.818824 0.0002

C 82.76322 123.3819 0.670789 0.5036
@TREND(1998M01) 14.79783 4.202454 3.521236 0.0006

R-squared 0.102281 Mean dependent var 42.19911

Adjusted R-squared 0.088254 S.D. dependent var 732.6513
S.E. of regression 699.5751 Akaike info criterion 15.96146
Sum squared resid 62643885 Schwarz criterion 16.02730
Log likelihood -1042.475 F-statistic 7.291758
Durbin-Watson stat 2.579876 Prob(F-statistic) 0.001002

As we see from the table above, tau statistic of export series is smaller than the table value at
the 5% significance level. So we could reject the null hypothesis that export series is non-
stationary. As a result, export series is stationary.

Null Hypothesis: E has a unit root

Exogenous: Constant, Linear Trend
Lag Length: 0 (Fixed)

t-Statistic Prob.*

Augmented Dickey-Fuller test statistic -1.473565 0.8338

Test critical values: 1% level -4.029595
5% level -3.444487
10% level -3.147063

*MacKinnon (1996) one-sided p-values.

Augmented Dickey-Fuller Test Equation

Dependent Variable: D(E)
Method: Least Squares
Date: 02/10/10 Time: 01:37
Sample (adjusted): 1998M02 2008M12
Included observations: 131 after adjustments

Variable Coefficient Std. Error t-Statistic Prob.

E(-1) -0.033867 0.022983 -1.473565 0.1431

 C 0.029720 0.019227 1.545793 0.1246
@TREND(1998M01) 0.000241 0.000337 0.716982 0.4747

R-squared 0.018729 Mean dependent var 0.010190

Adjusted R-squared 0.003397 S.D. dependent var 0.099987
S.E. of regression 0.099817 Akaike info criterion -1.748324
Sum squared resid 1.275317 Schwarz criterion -1.682479
Log likelihood 117.5152 F-statistic 1.221560
Durbin-Watson stat 1.886049 Prob(F-statistic) 0.298183

As we see from the table above, tau statistic of exchange rate is smaller than the table value at
the 5% significance level. So we could not reject the null hypothesis that exchange rate series
is non-stationary. First difference of the exchange rate is also stationary as a result of Dickey-
Fuller test which is given below.

Null Hypothesis: D(E) has a unit root

Exogenous: Constant, Linear Trend
Lag Length: 0 (Fixed)

t-Statistic Prob.*

Augmented Dickey-Fuller test statistic -10.81964 0.0000

Test critical values: 1% level -4.030157
5% level -3.444756
10% level -3.147221

*MacKinnon (1996) one-sided p-values.

Augmented Dickey-Fuller Test Equation

Dependent Variable: D(E,2)
Method: Least Squares
Date: 02/10/10 Time: 01:38
Sample (adjusted): 1998M03 2008M12
Included observations: 130 after adjustments

Variable Coefficient Std. Error t-Statistic Prob.

D(E(-1)) -0.960177 0.088744 -10.81964 0.0000

C 0.017997 0.018084 0.995192 0.3215
@TREND(1998M01) -0.000123 0.000236 -0.519145 0.6046

R-squared 0.479669 Mean dependent var -0.000370

Adjusted R-squared 0.471475 S.D. dependent var 0.138876
S.E. of regression 0.100962 Akaike info criterion -1.725329
Sum squared resid 1.294565 Schwarz criterion -1.659155
Log likelihood 115.1464 F-statistic 58.53772
Durbin-Watson stat 1.999881 Prob(F-statistic) 0.000000

Engle and Granger pointed out that a linear combination of two or more non-stationary
series may be stationary. If such a stationary linear combination exists, the non-stationary
time series are said to be cointegrated. The stationary linear combination is called the
cointegrating equation and may be interpreted as a long-run equilibrium relationship among
the variables. As a result of the unit root tests; we found that FDI, Export are stationary.
However, e (exchange rate) time series is integrated of order 1. We could not use
cointegration test to look whether there exist long-run stable export demand function for
Turkey due to differences of integrated level among variables.

5- Conclusion
There are several reasons why foreign direct investment has become a much discussed topic.
Studies in the literature have shown that foreign direct investments have contributed
remarkably to host countries’ impressive export expansion and economic growth. The other,
much more widely held view is that increased export growth can trigger greater productivity
and economic growth, thus creating more exports in an upward spiral cycle. As the
relationship becomes increasingly interdependent, the linkages between these two variables
become increasingly important. FDI has increased dramatically since the 1980s in Turkey as
it has in the rest of the world. Many countries have offered special subsidies to attract foreign
capital since FDI and portfolio inflows encourage and accelerate overall economic growth in
recipient countries. This research examined the relationship between export performance and
FDI in Turkey during the period 1998-2008 by estimating the model, export demand function
which is determined by foreign direct investment and exchanged rate. After conducting the
econometric regression process, our findings show that there is robust evidence for the
positive relationship between exports and FDI in Turkey. The correlation coefficients
illustrated on the matrix in the emprical results part indicate this result.
To be left for further research, our study of FDI underestimates the channels that acquisition
of human capital and the level of technology diffusion which are related to FDI as the
previous studies revealed. Hence, it is adviced to examine Turkey by parting regions in terms
of the level of education and the nature of the technology to observe the efficiency of FDI on
export performance.
References:

Basu P., Chakraborty C. and Reagle D., (2003), Liberalization, FDI and Growth in
Developing Countries:A Panel Cointegration Approach.

Borensztein E., De Gregorio J. and Lee J-W, (1995), How Does Foreign Direct Investment
Affect Economic Growth.

Shujie Yao and Kailei, (2007), Economic growth in the presence of FDI: the perspective of
newly industrialising economies. Journal of Comparative Economics.

Zhang,K S.Song (2000), Promoting exports:the role of inward Fdi in China''

Kepenek Y. (2007), Ekonominin Genel Dengesi

Celasun,M. (1994) Trade and Industralization in Turkey

Marchant, M. , Manukyan T., Koo W. (2002) International Trade and Foreign Direct
Investment: A focus on the free trade area of the Americas.

Aizenman J.(2005) FDI and Trade- Two way Linkages?

Wikipedia, (2009), UN Human Development Report 2009. Online

http://en.wikipedia.org/wiki/File:UN_Human_Development_Report_2009.PNG

APPENDIX
X (millionUSD) M (millionUSD) FDI (millionUSD) e USDTL
January-1998 2193,865 3105,602 17 0,212995
February 2063,852 3875,014 67 0,212995
March 2477,471 4363,698 37 0,212995
April 1917,282 3633,694 65 0,212995
May 2417,913 4174,760 36 0,212995
June 2261,733 4167,461 134 0,212995
July 2209,368 4192,462 108 0,212995
August 2237,388 3729,410 65 0,212995
September 2208,025 3659,811 76 0,212995
October 2495,375 3637,666 96 0,212995
November 2252,603 3511,683 46 0,212995
December 2239,076 3870,130 193 0,212995
January-1999 1883,315 2226,510 35 0,212995
February 2194,475 2788,102 90 0,212995
March 2402,243 3045,149 78 0,212995
April 1953,003 3334,086 80 0,212995
May 2225,595 3409,307 110 0,212995
June 2122,324 3586,517 83 0,212995
July 2254,965 3618,067 49 0,212995
August 1939,837 3178,335 25 0,212995
September 2273,769 3643,739 25 0,212995
October 2658,570 3559,048 94 0,212995
November 2447,752 3848,185 -9 0,212995
December 2231,377 4434,227 123 0,212995
January-2000 2123,098 3229,067 435 0,212995
February 2263,418 3931,495 27 0,212995
March 2316,917 4164,053 45 0,212995
April 2438,601 4491,494 12 0,212995
May 2338,187 4698,034 158 0,212995
June 2325,801 4964,509 152 0,212995
July 2288,328 4677,509 -697 0,212995
August 2044,083 4879,028 113 0,212995
September 2403,298 4643,519 219 0,212995
October 2244,784 5024,136 125 0,212995
November 2499,363 5362,480 313 0,212995
December 2489,027 4437,497 80 0,212995
January-2001 2236,402 4071,580 274 0,212995
February 2515,772 3594,476 1552 0,212995
March 2546,102 3108,975 48 0,212995
April 2616,050 3037,989 45 1,194765
May 2884,681 3558,810 11 1,134225
June 2561,640 3298,941 99 1,213215
July 2483,787 3436,567 211 1,32409
August 2579,467 3502,144 76 1,397275
September 2595,735 3424,977 253 1,47168
October 2812,546 3364,479 541 1,60828
November 2841,732 3559,438 132 1,528535
December 2660,302 3440,708 110 1,460325
January-2002 2607,320 3432,188 22 1,376465
February 2383,773 3038,171 35 1,3598
March 2918,944 3938,696 41 1,360565
April 2742,858 4212,571 66 1,32143
May 3000,325 4304,487 303 1,40038
June 2770,694 3936,731 33 1,528585
July 3103,852 4599,928 39 1,659225
August 2975,889 4418,817 125 1,64154
September 3218,207 4509,888 41 1,65323
October 3501,128 4830,104 270 1,658185
November 3593,605 4962,305 59 1,612205
December 3242,495 5369,913 48 1,590505
January-2003 3533,706 4425,556 123 1,66418
February 2923,460 4186,023 81 1,63728
March 3908,256 5755,549 120 1,664435
April 3662,183 5211,102 73 1,63325
May 3860,471 5531,855 111 1,498895
June 3796,114 5727,244 56 1,428325
July 4236,114 6267,433 117 1,40371
August 3828,726 5974,767 253 1,40384
September 4114,678 6205,528 158 1,377865
October 4824,388 6575,388 198 1,435635
November 3969,697 5244,963 309 1,476425
December 4595,042 8234,284 152 1,436345
January-2004 4619,661 6329,957 153 1,3543
February 3664,503 6139,442 443 1,33035
March 5218,042 8451,888 110 1,32157
April 5072,463 7932,034 132 1,357575
May 5170,062 7990,553 237 1,509405
June 5284,383 8467,765 335 1,494275
July 5632,139 8728,466 374 1,453305
August 4707,491 7883,362 175 1,477715
September 5656,284 8486,552 290 1,504575
October 5867,342 8087,592 275 1,49062
November 5733,909 8568,140 128 1,44924
December 6540,874 10474,016 133 1,399405
January-2005 4997,280 7219,680 186 1,35633
February 5651,741 8323,737 384 1,31474
March 6591,859 10196,353 205 1,30929
April 6128,132 9595,500 192 1,360415
May 5977,226 9811,620 250 1,37158
June 6038,534 9947,499 267 1,361145
July 5763,466 9596,123 1142 1,338215
August 5552,867 10272,181 697 1,34636
September 6814,269 10365,939 804 1,34173
October 6772,179 10089,812 336 1,356955
November 5942,576 9673,129 3192 1,35911
December 7246,279 11682,578 2376 1,35246
January-2006 5133,049 8145,534 440 1,335215
February 6058,251 9796,220 394 1,325785
March 7411,102 11605,026 369 1,33409
April 6456,090 11587,101 571 1,337185
May 7041,543 12694,201 6837 1,42781
June 7815,434 12465,724 633 1,603235
July 7067,411 11709,384 326 1,555605
August 6811,202 12276,087 3338 1,46837
September 7606,551 12152,978 234 1,48137
October 6888,813 11199,556 2957 1,478675
November 8641,475 12896,574 2302 1,457725
December 8603,753 13047,782 1784 1,432185
January-2007 6564,559 10591,885 6551 1,42632
February 7656,951 11383,177 1676 1,396615
March 8957,851 13234,192 1283 1,40911
April 8313,312 12919,281 777 1,35988
May 9147,620 14935,155 869 1,33666
June 8980,247 14265,946 1395 1,31979
July 8937,741 15214,033 1959 1,28376
August 8736,689 14681,667 1094 1,31439
September 9038,743 14459,084 1492 1,26449
October 9895,216 15626,532 1098 1,200245
November 11318,798 16631,882 615 1,191115
December 9724,017 16119,874 3237 1,181025
January-2008 10632,207 16338,588 1303 1,175655
February 11077,899 16026,520 731 1,195455
March 11428,587 16812,088 2732 1,24208
April 11363,963 17889,469 1106 1,30143
May 12477,968 19306,133 2157 1,250205
June 11770,634 19476,568 2253 1,23529
July 12595,426 20557,428 1487 1,214535
August 11046,830 19251,335 1206 1,179185
September 12793,148 17884,561 1233 1,23933
October 9722,708 14942,454 1878 1,469465
November 9395,872 12073,504 945 1,596005
December 7721,948 11404,921 1268 1,5479

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