THE EFFECT OF ECONOMIC RISK FACTORS ON FOREIGN DIRECT INVESTMENTS INFLOWS: A RESEARCH ON TURKIC WORLD

The movement of capital among countries’ economies in its favor accounts for international capital mobility which can be realized in the form of direct and indirect investments. It is accepted that the most important factors determining the attractiveness of foreign direct investment are economic / political stability. In this study, causality relationships between the net foreign direct capital inflows (FDI) of countries such as Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Türkiye, Turkmenistan, and Uzbekistan and economic policy uncertainty index (EPU), uncertainty index (WUI), geopolitical risk index (GPR), as well as fear indexes (VIX) are examined using the Granger causality methods. Then, Breitung and Candelon frequency causality analysis was used to determine whether the causality relationship between the variables is permanent or temporary. Analyzes were carried out using annual frequency data between 1993-2021. According to the results of the study, different country-specific causality relationships were determined.