Equity-based entry modes of emerging country multinationals: lessons from Turkey

Mehmet Demirbag, Ekrem Tatoglu, Keith Glaister

    Research output: Contribution to journalArticle

    89 Citations (Scopus)

    Abstract

    Based on a sample of 522 foreign affiliates of Turkish multinational enterprises (MNEs) with varying levels of Turkish equity ownership, this study provides an empirical analysis of the determinants of equity-based entry mode strategies in host country markets. A number of hypotheses are developed to examine the impact of institutional, transaction specific and firm level variables on Turkish MNEs’ choice of equity ownership mode in their foreign affiliates. The results reveal that institutional variables are important in explaining the equity composition of foreign affiliates of Turkish MNEs. Particularly important in determining equity ownership mode were found to be political constraints, linguistic distance, knowledge infrastructure and the extent of parent diversity. Results concerning the influences of the size of the affiliate are contrary to expectations and contradict the findings of previous research. No support was found for the impact of cultural distance on the equity ownership mode of Turkish MNEs in their foreign affiliates. Apart from political constraints, equity ownership choice and its underlying determinants do not vary between emerging and developed host country markets.
    LanguageEnglish
    Pages445-462
    Number of pages18
    JournalJournal of World Business
    Volume44
    Issue number4
    DOIs
    Publication statusPublished - Oct 2009

    Fingerprint

    Equity
    Multinationals
    Turkey
    Emerging countries
    Equity ownership
    Mode of entry
    Multinational enterprises
    Foreign affiliates
    Political constraints
    Host country
    Institutional variables
    Cultural distance
    Empirical analysis
    Entry mode

    Keywords

    • institutional theory
    • emerging countries
    • multinational enterprises
    • wholly owned subsidiaries
    • Turkey

    Cite this

    Demirbag, Mehmet ; Tatoglu, Ekrem ; Glaister, Keith. / Equity-based entry modes of emerging country multinationals : lessons from Turkey. In: Journal of World Business. 2009 ; Vol. 44, No. 4. pp. 445-462.
    @article{2753f9c320094315b224176eabdd74cd,
    title = "Equity-based entry modes of emerging country multinationals: lessons from Turkey",
    abstract = "Based on a sample of 522 foreign affiliates of Turkish multinational enterprises (MNEs) with varying levels of Turkish equity ownership, this study provides an empirical analysis of the determinants of equity-based entry mode strategies in host country markets. A number of hypotheses are developed to examine the impact of institutional, transaction specific and firm level variables on Turkish MNEs’ choice of equity ownership mode in their foreign affiliates. The results reveal that institutional variables are important in explaining the equity composition of foreign affiliates of Turkish MNEs. Particularly important in determining equity ownership mode were found to be political constraints, linguistic distance, knowledge infrastructure and the extent of parent diversity. Results concerning the influences of the size of the affiliate are contrary to expectations and contradict the findings of previous research. No support was found for the impact of cultural distance on the equity ownership mode of Turkish MNEs in their foreign affiliates. Apart from political constraints, equity ownership choice and its underlying determinants do not vary between emerging and developed host country markets.",
    keywords = "institutional theory, emerging countries, multinational enterprises, wholly owned subsidiaries, Turkey",
    author = "Mehmet Demirbag and Ekrem Tatoglu and Keith Glaister",
    year = "2009",
    month = "10",
    doi = "10.1016/j.jwb.2008.11.009",
    language = "English",
    volume = "44",
    pages = "445--462",
    journal = "Journal of World Business",
    issn = "1090-9516",
    number = "4",

    }

    Equity-based entry modes of emerging country multinationals : lessons from Turkey. / Demirbag, Mehmet; Tatoglu, Ekrem; Glaister, Keith.

    In: Journal of World Business, Vol. 44, No. 4, 10.2009, p. 445-462.

    Research output: Contribution to journalArticle

    TY - JOUR

    T1 - Equity-based entry modes of emerging country multinationals

    T2 - Journal of World Business

    AU - Demirbag, Mehmet

    AU - Tatoglu, Ekrem

    AU - Glaister, Keith

    PY - 2009/10

    Y1 - 2009/10

    N2 - Based on a sample of 522 foreign affiliates of Turkish multinational enterprises (MNEs) with varying levels of Turkish equity ownership, this study provides an empirical analysis of the determinants of equity-based entry mode strategies in host country markets. A number of hypotheses are developed to examine the impact of institutional, transaction specific and firm level variables on Turkish MNEs’ choice of equity ownership mode in their foreign affiliates. The results reveal that institutional variables are important in explaining the equity composition of foreign affiliates of Turkish MNEs. Particularly important in determining equity ownership mode were found to be political constraints, linguistic distance, knowledge infrastructure and the extent of parent diversity. Results concerning the influences of the size of the affiliate are contrary to expectations and contradict the findings of previous research. No support was found for the impact of cultural distance on the equity ownership mode of Turkish MNEs in their foreign affiliates. Apart from political constraints, equity ownership choice and its underlying determinants do not vary between emerging and developed host country markets.

    AB - Based on a sample of 522 foreign affiliates of Turkish multinational enterprises (MNEs) with varying levels of Turkish equity ownership, this study provides an empirical analysis of the determinants of equity-based entry mode strategies in host country markets. A number of hypotheses are developed to examine the impact of institutional, transaction specific and firm level variables on Turkish MNEs’ choice of equity ownership mode in their foreign affiliates. The results reveal that institutional variables are important in explaining the equity composition of foreign affiliates of Turkish MNEs. Particularly important in determining equity ownership mode were found to be political constraints, linguistic distance, knowledge infrastructure and the extent of parent diversity. Results concerning the influences of the size of the affiliate are contrary to expectations and contradict the findings of previous research. No support was found for the impact of cultural distance on the equity ownership mode of Turkish MNEs in their foreign affiliates. Apart from political constraints, equity ownership choice and its underlying determinants do not vary between emerging and developed host country markets.

    KW - institutional theory

    KW - emerging countries

    KW - multinational enterprises

    KW - wholly owned subsidiaries

    KW - Turkey

    U2 - 10.1016/j.jwb.2008.11.009

    DO - 10.1016/j.jwb.2008.11.009

    M3 - Article

    VL - 44

    SP - 445

    EP - 462

    JO - Journal of World Business

    JF - Journal of World Business

    SN - 1090-9516

    IS - 4

    ER -