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Institutional quality similarity, corruption distance and inward FDI in Turkey

Author

Listed:
  • Eren, T. Mesut
  • Jimenez, Alfredo

Abstract

In this paper we investigate the impact of institutional differences as a determinant of Turkish FDI inflows from OECD economies. We focus on the corruption distance between the home and host countries as a crucial part of institutional quality. Our results confirm that FDI flows are higher when they come from countries with low differences in corruption with Turkey. Conversely, FDI flows are negatively affected when there exists a large difference in corruption between the investing country and Turkey. This is explained by the ability of firms to obtain a higher return from their resources and capabilities in those environments with a similar idiosyncrasy to the one of their home country.

Suggested Citation

  • Eren, T. Mesut & Jimenez, Alfredo, 2015. "Institutional quality similarity, corruption distance and inward FDI in Turkey," Journal of East European Management Studies, Rainer Hampp Verlag, vol. 20(1), pages 88-101.
    • Handle: RePEc:rai:joeems:jeems-2015-01-eren
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    File URL: http://www.hampp-verlag.de/hampp_e-journals_JEMS.htm#115
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    Citations

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    Cited by:

    1. Kechagia, Polyxeni & Metaxas, Theodore, 2020. "Institutional quality and FDI inflows: an empirical investigation for Turkey," MPRA Paper 104309, University Library of Munich, Germany.
    2. Hasan Boztoprak & Mehmet Eryilmaz, 2021. "The strategy tripod perspective in explaining firms’ export performance," Upravlenets, Ural State University of Economics, vol. 12(5), pages 50-69, November.
    3. Luo, Lianfa & Liu, Peiyao & Zhu, Fangjing & Sun, Yongping & Liu, Lingna, 2022. "Policy objective bias and institutional quality improvement: Sustainable development of resource-based cities," Resources Policy, Elsevier, vol. 78(C).
    4. Alfredo Jiménez & Marcello Russo & Johannes Marcelus Kraak & Guoliang Frank Jiang, 2017. "Corruption and Private Participation Projects in Central and Eastern Europe," Management International Review, Springer, vol. 57(5), pages 775-792, October.
    5. Ishfaq Hamid & Md Shabbir Alam & Imran Ali Baig & Pabitra Kumar Jena, 2024. "Nexus Between Institutional Quality and Foreign Direct Investment Inflows: Panel Data Analysis of SAARC Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7993-8019, June.

    More about this item

    Keywords

    Foreign Direct Investment; Turkey; OECD countries; institutional differences; corruption; multinational enterprises;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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