Institutional quality similarity, corruption distance and inward FDI in Turkey.

Eren, T. Mesut; Jimenez, Alfredo

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.

OECD countries; TURKEY; FOREIGN investments; CORPORATE corruption; INTERNATIONAL business enterprises; ECONOMIC conditions in Turkey, 1960-; INTERNATIONAL economic relations

Journal for East European Management Studies, 2015, Vol 20, Issue 1, p88

0949-6181

Academic Journal

10.5771/0949-6181-2015-1-88