The purpose of this study is to analyze the effect of foreign direct investment on industrialization in 19 developing countries, which have upper-middle income level in the 2000-2013 period. Panel Ordinary Least Squares (OLS), Fixed Effects (FE) and Random Effects (RE) Models was applied in order to determine this effect. Although there are a lot of studies that examined the effect of foreign direct investment on economic growth, there are few studies that examined the effect of on industrialization in the empirical literature. In this respect this study has importance on both to contribute to literature in this issue and to make proper economic policy suggestions. According to the analysis results, while the export and gross capital formation variables have an important effect, the foreign direct investment variable has no effect on industrialization in developing countries. Empirical results are largely consistent with studies on this issue.
Foreign Direct Investment, Industrialization, Panel Data Analysis.