Abstract

In this article, the relationship between globalization and the size of the government has been tested for the period of 2006 to 2012 in the case of Turkey. In this context, the relationship between foreign direct investments and disaggregated public expenditures under the economic classification of public expenditures has been addressed under the Granger causality and VAR model. As the result of an estimation made using monthly data, it has been concluded that there is a positive, unilateral causal relationship from foreign direct investments to capital transfers and current transfers included in the economic classification.It is concluded that the relationship between globalization and the size of the supports the compensation hypothesis.

This work is licensed under a Creative Commons Attribution 4.0 License.