Locational Determinants of Foreign Investors in Istanbul

Abstract

The fact that relationships at global levels have increased necessitates redefinition of the roles of nations, regions, and metropolitan areas. In recent years, during the economic transportation process experienced on a global scale, the traditional role of cities has been changing, and preferences about location selections, which are related to the requirements of urban functions, have displayed changes as well. In this study, the objective is to ascertain the determining characteristics of decisions about location choice by foreign direct investors in Istanbul. The study is based on a sample of 100 companies that were surveyed in 2002. The ranking of location factors has been analyzed using not only variance of means but also principal components factor analysis. The result of the analysis verifies that the processes which influence location choice in Istanbul are similar to those found in other related studies. Since the beginning of the 1990s, Istanbul has become the hub of a vast hinterland extending from the Balkans to the Caucuses and represents a prime focus for foreign investment. For this reason, it is very significant to know the location choice criteria sought especially in the regions of Istanbul, where foreign capital is to be invested, in order to attract foreign-owned companies in the industrial and service sector. In this study, the criteria to which the foreign-owned investments in the industrial and service sector attach significance in location choice are set for each sector.