An integrated AHP-TOPSIS framework for foreign direct investment in Turkey
Calik, Ahmet and Cizmecioglu, Sinan and Akpinar, Ayhan
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Abstract
Foreign direct investment (FDI) is seen as an essential part of
development due to the contribution of the host country. Profits of FDI
such as technology transfers, spillover benefits, and increasing
competition have encouraged both of domestic firms and policymakers to
attracting FDI. In the course of making investment decisions, foreign
investors prefer countries that follow stable economic policies, achieve
a certain level of development of financial structure, and have legal
regulatiions that favour foreign capital. Turkey, one of the emerging
market economies, met the challenges including but not limited to high
inflation, diminishing growth rates, and currency depreciation. Even
with its ongoing currency crisis, Turkey continues to remain a top pick
for investors. From this point of view, this paper investigates the
selection of the most suitable sector by taking into consideration the
economic, political, and country factors for foreign investors. The
proposed methodology for sector selection contains three stages. The
criteria for FDI are defined from the current literature, and we narrow
it down according to the opinions of the decision-making group. After
that, the analytic hierarchy process method used to obtain the priority
order of the criteria. Finally, we use the Technique for Order of
Preference by Similarity to Ideal Solution method to rank the sectors in
accordance with the evaluation criteria. Additionally, we perform a
sensitivity analysis to observe the effects of possible changes in the
weights of the criteria. We designate three prime criteria, which are
political, economic, and country. The results indicate that political
criterion have the highest weight and based on the results of stages,
manufacturing sector is obtained as primer election industry.... Show more Show less