LEGAL TOOLS AND COMPONENTS FOR ATTRACTING FDI, A COMPARATIVE STUDY: TÜRKİYE AND THE UNITED STATES

This paper examines the differences and similarities between the Foreign Direct Investment (FDI) regulations of Türkiye and the United States (US) and their economic impacts by analyzing the evolution of their legal frameworks. The first section provides an overview of FDI and discusses both global and local trends. In the following sections, the FDI legislation and regulations in Türkiye and the US are analyzed comparatively. The final section reviews existing literature on the factors influencing FDI in both countries, highlighting how their legal frameworks may have affected FDI inflows. The study finds that in the US, FDI is influenced by fundamental principles protected by the Constitution. While through several amendments, Türkiye’s FDI codes have evolved over the years, resulting in a somewhat more liberal legislative framework. The “national security” is a buzzword in the contemporary US FDI legal framework, which began in the 1970s, and FDI screening mechanism has been settled throughout the years with a deeper institutionalized structure. Türkiye stands with the come as you are policy, while the recent FDI screening wave in developed countries addresses international relations positions and critical sectors. Türkiye has made significant progress in attracting FDI by implementing legal regulations aimed at restoring investor confidence. In Türkiye’s experience, the FDI liberalization came into force when stability, the market-friendly reform calendar, the EU harmonization process, positive expectations, and macroeconomic stability were evident and acted as an anchor of the legal system. In the US, in addition to the GDP size, growth, infrastructure, labor price and quality; technology spillover purposes also illustrate that industrialization, technology, and micro capacities make cross-cutting elements for FDI attraction. While a liberal legal framework is a necessary condition for attracting investment, it is not sufficient on its own. Beyond a certain point, structural factors become more influential.