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What is Complementary Relationship

Handbook of Research on Strategic Developments and Regulatory Practice in Global Finance
It refers to the condition where the individual explanatory power of two explanatory variables in a model is low or non-existent if one of them is neglected, but is enhanced when both of them are included in the model.
Published in Chapter:
Foreign Direct Investment, Financial Development and Economic Growth: The Case of Turkey
Kadir Y. Eryigit (Uludağ University, Turkey) and Sibel Bali Eryigit (Uludağ University, Turkey)
DOI: 10.4018/978-1-4666-7288-8.ch021
This chapter discusses the effects of financial development on relationships between FDI and economic growth within the framework of the relevant literature, and researches empirically the current situation in Turkey. To that end, analysis is conducted through the use of Johansen et al. (2000) cointegration method, based on the quarterly data for the period between 1989 and 2011. To the authors' knowledge, there are no studies assessing the complementary relationship between FDI and financial development in the relevant literature in Turkey. According to the results, financial development and FDI affect economic growth positively, and financial system makes important contributions to the positive effect of FDI on economic growth.
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