INVESTIGATING THE NEXUS AMONG FOREIGN CAPITAL, WORKING CHILDREN, AND MULTINATIONAL ENTERPRISES IN TURKEY

Abstract

The present research is motivated by the eclectic approach and aims to shed light on the locational non-traditional determinants of foreign direct investment inflows. Considering the limited available knowledge on the interaction between foreign capital inflows and a worldwide socioeconomic phenomenon, namely child labor, the research extends an empirical model and examines the significance of location advantages when investing abroad, focusing on Turkey as a recipient country. A time series analysis using secondary annual data over the period 2002-2021 is conducted. Unit root and cointegration tests, as well as autoregressive distributed lag and error correction models, are applied. The results reveal that child labor in Turkey has a statistically insignificant negative impact on foreign capital inflows in both the short and the long-run period, while the reverse causality analysis proves that the impact of
FDI inflows on child labor in Turkey is statistically insignificant in the long- and short term. Policy implications and suggestions for future research are discussed.