Internationalization of Turkish MNEs

Abstract

Purpose

This paper aims to focus on the company‐specific level on the causes of Turkey's recent outward foreign direct investment (OFDI) surge. The paper analyzes the reasons as to why, how, and where Turkish multinational enterprises (MNEs) invest abroad, focusing on the differences between large enterprises and small‐ and medium‐sized enterprises (SMEs).

Design/methodology/approach

The case‐study approach, based on eight cases, relies on the insights from the Uppsala internationalization model as well as those from FDI theories. The case studies are based on on‐site interviews with company executives.

Findings

That paper finds that although different OFDI drivers vary in importance among the eight MNEs studied, the incremental and peripheral nature of their internationalization, mostly through brownfield FDI, fits the Uppsala model well. Although they preferred majority‐owned joint ventures with local partners initially to minimize uncertainty and start up costs, to cope with bureaucratic obstacles, and to gain access to technology, they eventually acquired full ownership of their foreign affiliates after exhausting the initial benefits from joint venturing.

Research limitations/implications

The case‐study approach limits the generalization of the findings. However, they can serve as an initial attempt to investigate the drivers behind Turkey's recent OFDI surge. Future studies based on larger number of cases chosen in a systematic way may be able to confirm and strengthen the findings and their managerial implications.

Originality/value

The paper is the first company‐specific attempt to explain the OFDI motivations and managerial decision making of Turkish MNEs by distinguishing between between large enterprises and SMEs.

Citation

Erdilek, A. (2008), "Internationalization of Turkish MNEs", Journal of Management Development, Vol. 27 No. 7, pp. 744-760. https://doi.org/10.1108/02621710810883634