Internationalization and domestic political support: a differentiation of R&D-related foreign and domestic firms in Turkey

Research output: Contribution to journalArticleResearchpeer review

Authors

  • Timo Kleiner-Schaefer
  • Ekrem Tatoglu
  • Ingo Liefner

External Research Organisations

  • Philipps-Universität Marburg
  • Gulf University for Science and Technology
  • İbn Haldun University (IHU)
View graph of relations

Details

Original languageEnglish
Pages (from-to)624-648
Number of pages25
JournalInternational Journal of Emerging Markets
Volume19
Issue number3
Early online date9 Aug 2022
Publication statusPublished - 21 Feb 2024

Abstract

Purpose: This paper contributes insights into how different firm types in the emerging market (EM) of Turkey respond to upgrading pressures in terms of internationalization and the usage of domestic political support. It seeks to highlight how the usage of and the responses to different strategies, connections and policy instruments vary with firm types. Design/methodology/approach: Binary logistic regression analysis is used to differentiate and identify characteristics of firms regarding market-seeking strategies and their usage of institutional and financial support. The analysis is based on survey data from firms located in the metro-region of Istanbul: advanced market multinational enterprises (AMNEs), Turkish MNEs (TMNEs) and domestic Turkish firms (DTFs). Findings: Different types of firms within the population of innovative firms in the EM setting of Turkey show significant variety regarding the usage of and the responses to key factors affecting internationalization. AMNEs particularly benefit from investment and export incentives as well as from establishing political connections in Turkey. DTFs significantly use tax incentives and primarily seek advanced markets. TMNEs particularly benefit from investment and export incentives and prefer to target advanced markets. Research limitations/implications: Using Turkey as a single-country setting is a limitation to the generalizability of the results. Future studies could use more cases of AMNEs to compare different countries of origin. In addition, the intended focus on R&D-related firms produces specific outcomes for such companies. Practical implications: National and regional policies need to pursue different strategies for the surveyed groups of firms to attract and maintain foreign direct investments (FDIs) of AMNEs as well as to support outward FDIs of domestic firms and EM MNEs. In particular, policies for market entries and knowledge sourcing in advanced markets are becoming a crucial factor for EM firms in overcoming a shortage of resources at home. Originality/value: This paper’s findings challenge existing theories such as the concept of psychic distance or liabilities of foreignness, which do not always provide an adequate explanation for internationalization activities of EM firms. In addition, it is highly relevant to apply an eclectic or multidimensional concept when conducting research in EMs in order to capture the interrelated constructs of upgrading, internationalization and political support.

Keywords

    Domestic firms, Emerging markets, Innovation, Institutions, Internationalization, Multinational enterprises, Political support, Turkey

ASJC Scopus subject areas

Cite this

Internationalization and domestic political support: a differentiation of R&D-related foreign and domestic firms in Turkey. / Kleiner-Schaefer, Timo; Tatoglu, Ekrem; Liefner, Ingo.
In: International Journal of Emerging Markets, Vol. 19, No. 3, 21.02.2024, p. 624-648.

Research output: Contribution to journalArticleResearchpeer review

Kleiner-Schaefer, T, Tatoglu, E & Liefner, I 2024, 'Internationalization and domestic political support: a differentiation of R&D-related foreign and domestic firms in Turkey', International Journal of Emerging Markets, vol. 19, no. 3, pp. 624-648. https://doi.org/10.1108/IJOEM-07-2019-0502
Kleiner-Schaefer, T., Tatoglu, E., & Liefner, I. (2024). Internationalization and domestic political support: a differentiation of R&D-related foreign and domestic firms in Turkey. International Journal of Emerging Markets, 19(3), 624-648. https://doi.org/10.1108/IJOEM-07-2019-0502
Kleiner-Schaefer T, Tatoglu E, Liefner I. Internationalization and domestic political support: a differentiation of R&D-related foreign and domestic firms in Turkey. International Journal of Emerging Markets. 2024 Feb 21;19(3):624-648. Epub 2022 Aug 9. doi: 10.1108/IJOEM-07-2019-0502
Kleiner-Schaefer, Timo ; Tatoglu, Ekrem ; Liefner, Ingo. / Internationalization and domestic political support : a differentiation of R&D-related foreign and domestic firms in Turkey. In: International Journal of Emerging Markets. 2024 ; Vol. 19, No. 3. pp. 624-648.
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abstract = "Purpose: This paper contributes insights into how different firm types in the emerging market (EM) of Turkey respond to upgrading pressures in terms of internationalization and the usage of domestic political support. It seeks to highlight how the usage of and the responses to different strategies, connections and policy instruments vary with firm types. Design/methodology/approach: Binary logistic regression analysis is used to differentiate and identify characteristics of firms regarding market-seeking strategies and their usage of institutional and financial support. The analysis is based on survey data from firms located in the metro-region of Istanbul: advanced market multinational enterprises (AMNEs), Turkish MNEs (TMNEs) and domestic Turkish firms (DTFs). Findings: Different types of firms within the population of innovative firms in the EM setting of Turkey show significant variety regarding the usage of and the responses to key factors affecting internationalization. AMNEs particularly benefit from investment and export incentives as well as from establishing political connections in Turkey. DTFs significantly use tax incentives and primarily seek advanced markets. TMNEs particularly benefit from investment and export incentives and prefer to target advanced markets. Research limitations/implications: Using Turkey as a single-country setting is a limitation to the generalizability of the results. Future studies could use more cases of AMNEs to compare different countries of origin. In addition, the intended focus on R&D-related firms produces specific outcomes for such companies. Practical implications: National and regional policies need to pursue different strategies for the surveyed groups of firms to attract and maintain foreign direct investments (FDIs) of AMNEs as well as to support outward FDIs of domestic firms and EM MNEs. In particular, policies for market entries and knowledge sourcing in advanced markets are becoming a crucial factor for EM firms in overcoming a shortage of resources at home. Originality/value: This paper{\textquoteright}s findings challenge existing theories such as the concept of psychic distance or liabilities of foreignness, which do not always provide an adequate explanation for internationalization activities of EM firms. In addition, it is highly relevant to apply an eclectic or multidimensional concept when conducting research in EMs in order to capture the interrelated constructs of upgrading, internationalization and political support.",
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AU - Tatoglu, Ekrem

AU - Liefner, Ingo

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