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

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  • Xanthippe Adamoglou

    (University of Macedonia)

  • Dimitrios Kyrkilis

    (University of Macedonia)

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.

Suggested Citation

  • Xanthippe Adamoglou & Dimitrios Kyrkilis, 2018. "FDI Entry Strategies as a Function of Distance—The Case of an Emerging Market: Turkey," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(4), pages 1348-1373, December.
    • Handle: RePEc:spr:jknowl:v:9:y:2018:i:4:d:10.1007_s13132-016-0425-1
    DOI: 10.1007/s13132-016-0425-1
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    1. Xanthippe Adamoglou & Dimitris Kyrkilis, 2020. "MNEs Entry Strategies through a Distance Framework: A New Perspective," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 70(3-4), pages 83-105, July-Dece.
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    3. Marina Gigliotti & Massimo Cossignani & Antonio Picciotti, 2019. "Why Enterprises Do Not Invest in Europe? Management Claims and Countries Conditions in Developed and Emerging Markets," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(4), pages 1738-1764, December.

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