Türkiye’de Finansal Gelişme, Doğrudan Yabancı Yatırımlar ve Ticari Açıklığın İnsani Gelişmeye Etkisi: Genişletilmiş ARDL Yaklaşımı
The Impact of Financial Development, Foreign Direct Investment and Trade Openness on Human Development in Türkiye: An Augmented ARDL Approach

Summary/Abstract: The use of material criteria such as income when assessing the welfare of societies can be misleading. In addition to income, which is a monetary measure, being educated and healthy better represents the welfare of individuals. The human development approach assesses the level of an individual's health and education, in addition to their income. In order to increase the level of human development, it is necessary to identify the factors that affect human development positively and negatively. This study analyzes the impact of financial development, foreign direct investment, and trade openness on human development in Türkiye for the period 1990–2020. The long-run relationship between the variables is analyzed with the augmented ARDL procedure. The bounds test results show that the variables are cointegrated. Long-run coefficients reveal that financial development has a positive effect on human development, while FDI and trade openness have a negative effect. According to the results of the Breitung-Candelon frequencydomain causality test, a unidirectional causality relationship was found from financial development to human development only in the long run, and a unidirectional causality relationship was found from human development to trade openness in the medium term but bidirectional in the long run. These results suggest that higher incomes, better health, and higher education levels require the development of financial markets and institutions and structural changes in the foreign trade regime and inward direct investment flows.

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