The global business world has been witnessing a radical change over recent decades. In the second half of the twentieth century, companies from the United States of America (USA) and Western Europeāand later Japan ādominated world markets for a long period of time. These companies exported their products to world markets through strong distribution channels . They enjoyed scale economies and developed their own brands. They engaged in foreign direct investment (FDI) in overseas regions to establish new production bases and to reach new markets. They successfully managed their global networks , utilizing their managerial know-how, and became multinational enterprises (MNEs). However, this dominant image of the developed country multinational enterprise (DC MNE) seems to have disappeared. Emerging markets that mostly offered raw materials, a cheap labor force, and new markets for DC MNEs began to change the nature of competition in world markets from the last quarter of the twentieth century. Despite their weak institutions, unstable political and economic conditions, and immature markets, these countries have, in this century, succeeded in becoming the home countries of rapidly growing companies (Demirbag & Yaprak, 2015). These firms, referred to as emerging country multinational enterprises (EC MNEs), have turned into successful challengers to DC MNEs. They successfully compete not only in their domestic markets but also in the home markets of their developed country counterparts. EC MNEs are not limited to a few countries. They originate from various economies, such as China, India, Brazil, Russia , Turkey, and South Africa amongst many others.
This new phenomenon has had a related impact on the academic community. In order to enhance our understanding of the nature of international business, scholars have undertaken numerous studies on many aspects of EC MNEs. A significant amount of research relates to EC MNEs (Deng, 2012; Filatotchev, Strange, Piesse, & Lien, 2007; Gubbi, Aulakh, Ray, Sarkar, & Chittoor, 2009; Lu, Liu, & Wang, 2011; Luo, 2003; Luo & Rui, 2009; Luo & Tung, 2007; Madhok & Keyhani, 2012; Mathews, 2006; Meyer & Thaijongrak, 2012; Sun, 2009; Tsai & Eisingerich, 2010; Yamakawa, Peng, & Deeds, 2008; Yiu, Lau, & Bruton, 2007). Indeed, this has been an important opportunity to test our current knowledge about MNEs, which was mostly built on the experiences of DC MNEs. Nevertheless, these studies seem to concentrate on specific regions or companies emerging from these regions. Therefore, the findings and contributions concerning the internationalization of EC MNEs are mostly biased toward certain countries, while other emerging countries remain under-researched (Jormanainen & Koveshnikov, 2012). In particular, these studies focus mostly on Asian companies, such as Chinese and Indian MNEs, and on Latin American companies, such as Brazilian MNEs. In their review article, Jormanainen and Koveshnikov (2012) demonstrate that 30% of the published articles on EC MNEs in 14 top international business journals between 2000 and 2010 focus solely on the Chinese experience. Moreover, Chinese MNEs are included in the 26% of the remaining articles on other EC MNEs. Indian and Latin American MNEs constitute 14% and 12% of the geographic focus of the selected articles respectively. Indian and Latin American MNEs constitute 14% and 12% of the geographic focus of the selected articles respectively. For this reason, more research from different contexts concerning EC MNEs is required to develop a general picture of the phenomenon being studied.
This book aims to contribute to the international business field by focusing on a different context: Turkey. Despite the increasing amount of Turkish outward foreign direct investment (OFDI) and Turkeyās interesting context as an OFDI sourcing country, studies investigating the internationalization of Turkish MNEs are few. Studies that attempt to reveal Turkish MNEsā entry modes (Demirbag, Tatoglu, & Glaister, 2009), their internationalization processes (Erdilek, 2008; Eren-Erdogmus, Cobanoglu, Yalcin, & Ghauri, 2010; Yaprak & Karademir, 2010), their location choices (Demirbag, Tatoglu, & Glaister, 2010), and the historical perspective of Turkish OFDI (Yavan, 2012) do exist. These scholarly articles naturally focus on a certain aspect of the phenomenon. There are no exclusive studies focusing on Turkish multinationals, apart from some studies at the national level. Therefore, we aim to make a contribution with our study in order to eliminate this deficiency.
In this book we aspire to depict the internationalization of Turkish multinationals by focusing on a set of firms from a variety of industries. We investigate the cases of 11 Turkish MNEs. There are two main research questions which constitute the essence of this book. First, what drives Turkish MNEs to internationalize? Second, how do Turkish MNEs run their internationalization processes? In order to develop answers to these questions we investigate the country-, industry-, and firm-level drivers of the internationalization of Turkish MNEs and reveal their motives for foreign expansion. Next, we examine their entry mode and location choices. Based on our findings we identify four different trajectories of Turkish MNEsā international expansion in which they apply different market entry strategies and follow different rationales. We then discuss Turkish MNEsā post-acquisition strategies, which are critical to their evolution in their internationalization process. We also compare the findings of this study to the mainstream and alternative perspectives to contribute to the recent debate in the international business field about whether existing theories and perspectives are adequate to explain the internationalization of EC MNEs.
In this book, we look at MNE internationalization from a strategic management viewpoint (Melin, 1992; Welch & Welch, 1996). We use three fundamental perspectives from the strategic management field: the resource-based view (RBV) (Barney, 1991), industry-based view (Ind.BV) (Porter, 1980), and institution-based view (Inst.BV) (Peng, Wang, & Jiang, 2008). These three perspectives provide an all-inclusive theoretical base to explore the driving forces of MNE internationalization (Gao, Murray, Kotabe, & Lu, 2009; Lu et al., 2011; Peng et al., 2008). In other words, applying these three views to Turkish MNEsā internationalization may shed some light on the plurality of the observed phenomena and allow us to develop a multilevel model accounting for the firm-, industry-, and country-specific factors resulting in the heterogeneity of EC MNE internationalization (Jormanainen & Koveshnikov, 2012). In order to identify motives for OFDI, we apply Dunningās classification in which he identifies four distinct motives, defined as market-, resource-, efficiency- , and asset-seeking FDI (Dunning, 1998). We also benefit from the asset-seeking and asset-exploiting FDI categorization (Makino, Lau, & Yeh, 2002) which further helps enrich our analysis.
Regarding the theoretical discussion, we use mainstream and emergent international business theories as our research lenses to examine MNE internationalization as a whole from different perspectives. In the field, the eclectic paradigm (OLI framework ) (Cantwell & Narula, 2001; Dunning, 1980, 1988, 2000, 2001; Erdener & Shapiro, 2005; Narula, 2006, 2010) and the internationalization process model (IPM) (Clark, Pugh, & Mallory, 1997; Forsgren, 2002; Johanson & Vahlne, 1977, 2009; Meyer & Thaijongrak, ...