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FDI Entry Strategies as a Function of Distance—The Case of an Emerging Market: Turkey

Xanthippe Adamoglou () and Dimitrios Kyrkilis ()
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Dimitrios Kyrkilis: University of Macedonia

Journal of the Knowledge Economy, 2018, vol. 9, issue 4, No 15, 1348-1373

Abstract: Abstract This paper examines the impact of replacing administrative/political distance by institutional distance in the CAGE distance framework. It then tests how the new CIGE framework is affected by two entry mode choices considering the emerging economy of Turkey. In addition, it approaches geographic distance through historical ties and kilometer differences, examining their role on the relationship proposed. The sample consists of 245 foreign equity investments concluded between 2002 and 2010 by investors from European Union Member States and 21 non-European Union countries. Results show that institutional distance affects both the entry mode choice and all other framework variables. Furthermore, geographic distance, through historical ties and kilometer differences, emerges as significant factor influencing the various forms of FDI ownership strategy in the case of Turkey.

Keywords: Entry mode choice; Multinational enterprises; CAGE distant framework; Institutional distance; Historical ties (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s13132-016-0425-1

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Handle: RePEc:spr:jknowl:v:9:y:2018:i:4:d:10.1007_s13132-016-0425-1