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PALGRAVE STUDIES OF
INTERNATIONALIZATION
IN EMERGING MARKETS
Turkish Multinationals
Market Entry and
Post-Acquisition Strategy
Yuksel Ayden, Mehmet Demirbag, and Ekrem Tatoglu

Palgrave Studies of Internationalization in
Emerging Markets
Series editors
Marin Marinov
Aalborg University
Aalborg, Denmark
Svetla Marinova
Aalborg University
Aalborg, Denmark
Emerging market nations such as Russia, Brazil, China, South Africa and
India as well as Eastern European territories, are in the process of changes
and growth that require specific study and attention. The international
business strategies employed in these territories target new opportunities,
the study of which provides scholars the opportunity to evolve interna-
tional business theory.
Covering three main themes - international business, management
and marketing – Palgrave Studies of Internationalization in Emerging
Markets will encompass a multiplicity of topics. Examining the new ways
in which firms from emerging economies develop and implement their
internationalization strategy, as well as their management and marketing
strategies, the series will encompass specific issues such as social entre-
preneurship, operations and regional specifics of internationalization.
Looking closer at the specifics underlying the development of emerging
market nations and their firms, this series aims to shed light on the cur-
rent and future issues associated with the challenges and opportunities
offered by the varying contexts of emerging markets.
More information about this series at

http://www.springer.com/series/15456
Yuksel Ayden • Mehmet Demirbag
Ekrem Tatoglu
Turkish
Multinationals
Market Entry and Post-Acquisition
Strategy
Yuksel Ayden Mehmet Demirbag
Fatih University University of Essex
Buyukcekmece, Turkey Southend-on-Sea, UK
Ekrem Tatoglu
Ibn Haldun University
Basaksehir, Turkey
Palgrave Studies of Internationalization in Emerging Markets

ISBN 978-3-319-57293-2 ISBN 978-3-319-57294-9 (eBook)
DOI 10.1007/978-3-319-57294-9
Library of Congress Control Number: 2017948168
© The Editor(s) (if applicable) and The Author(s) 2018

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Preface
In line with the growing interest in companies from emerging markets,

we conducted this study with the expectation that the Turkish experience
could make an original contribution to the growing body of research
on emerging markets. We were driven by the belief that a country like
Turkey, which is at the easternmost part of the West and the western-
most part of the East, is an interesting case study. In order to provide an
all-inclusive picture of the phenomenon under investigation, we utilized
several theoretical perspectives as research lenses. Therefore, this study
not only includes a trip among the stories of several Turkish multina-
tionals from different sectors, but also reviews prominent theoretical per-
spectives from international business and strategy. Each company case
offers unique experiences as well as sharing similarities with the others.
Throughout our work, we have seen that there are different routes to suc-
cess in the global business world. We have examined our findings in the
light of theoretical perspectives and presented them in our study. These
findings are scattered throughout the chapters of the book.
It has not always been easy to carry out this study. It was a challenge
to prepare the theoretical part of our book and present the extant litera-
ture in a proper structure without getting lost in the theoretical jungle
of the field. It was also a challenge to examine the significant amount of
qualitative data we collected from the field and to discuss them in appro-
priate chapters. The interviews we conducted with successful leaders and
v
vi Preface
executives in their organizations and industries provided valuable insights

and were very informative. We wish to thank the interviewees for their
valuable support.
Conducting the study is one matter, but preparing the book for pub-
lication is another. For this stage of the process, we would like to thank
Professor Marin A. Marinov and Professor Svetla T. Marinova, the edi-
tors of the Palgrave Studies of Internationalization in Emerging Markets
series, for their encouragement and guidance. We would like to thank Liz
Barlow and Lucy Kidwell from Palgrave Macmillan, who have worked
with us since the beginning of the project. Our long and exhausting
research has been transformed into this book with their persistent help
and guidance.
We dedicate this work to our families, who continuously support and
inspire us in our professional endeavors.
Aalborg, Denmark Yuksel Ayden

Mehmet Demirbag
Ekrem Tatoglu
Contents
1 Introduction 1
2 Internationalization of the Turkish Business

Environment: Historical Evolution and New Realities 11
3 Theoretical Perspectives on Emerging Country

Multinationals 33
4 Characteristics and Patterns of Turkish MNEs’

Internationalization 67
5 Market Entry Strategies of Turkish MNEs 127
6 Post-Acquisition Strategies of Turkish MNEs 169
7 Synthesis and New Directions for Research 187
vii
viii Contents
Appendix A: Case Firms 213
Appendix B: Research Methodology 231
Index239
List of Abbreviations
BKT Banka Kombetare Tregtare

BRIC Brazil, Russia, India, and China
CBRT Central Bank of the Republic of Turkey
CEO Chief Executive Officer
CIS Commonwealth of Independent States
DC MNE Developed Country Multinational Enterprise
EC MNE Emerging Country Multinational Enterprise
EFQM European Foundation for Quality Management
EMENACIS Europe, Middle East and North Africa, and Commonwealth of
Independent States
EU European Union
FDI Foreign Direct Investment
FMCG Fast Moving Consumer Goods
FSA Firm-Specific Advantage
GDP Gross Domestic Product
GLP Good Laboratory Practices
GMP Good Manufacturing Practices
IFDI Inward Foreign Direct Investment
IMF International Monetary Fund
Ind.BV Industry-Based View
Inst.BV Institution-Based View
IPM Internationalization Process Model
ISI Import Substitution Industrialization
ix
x List of Abbreviations
JV Joint Venture
LLL Linkage, Leverage, Learning
MENA Middle East and North Africa
MNE Multinational Enterprises
Oa Asset-Based Ownership Advantages
ODM Original Design Manufacturer
OEM Original Equipment Manufacturer
OFDI Outward Foreign Direct Investment
Oi Institutional Ownership Advantages
Ot Transaction-Type Ownership Advantages
OTC Over-the-Counter
R&D Research and Development
RBV Resource-Based View
TMT Top Management Team
TSI Turkish Statistical Institute
UK United Kingdom
UNCTAD United Nations Conference on Trade and Development
USA United States of America
WIPO World Intellectual Property Organization
WOS Wholly Owned Subsidiary
List of Figures
Fig. 2.1 Turkey’s population and population growth rate

from 1980 to 2015. Source: World Bank Database 13
Fig. 2.2 Turkey’s GDP and GDP per capita. Source: World Bank
Database13
Fig. 2.3 Proportion of GDP over the years. Source: World Bank
Database14
Fig. 2.4 Turkey’s international trade performance from 1980 to 2016.
Source: Turkish Statistical Institute Database 17
Fig. 2.5 Turkey’s IFDI performance over the years (billion dollars).
Source: UNCTAD Database 19
Fig. 2.6 Turkey’s OFDI performance over the years (billion dollars).
Source: UNCTAD Database 20
Fig. 2.7 Leading OFDI destinations in 2015. Source: Central Bank
of the Republic of Turkey Database 25
Fig. 2.8 Leading IFDI destinations in 2015. Source: Central Bank
of the Republic of Turkey Database 26
xi
List of Tables
Table 2.1 Turkey’s leading exporting and importing partners in 2016 22

Table 2.2 Turkey’s leading exporting and importing products in 2016 24
Table 2.3 Composition of OFDI stock in 2015 27
Table 2.4 Composition of IFDI stock in 2015 28
Table 4.1 Case study firms 68
Table 4.2 Summary of case analyses: drivers of internationalization
at firm, industry, and institutional levels 70
Table 4.3 Summary of case analyses: motives, choices of location,
ownership, entry modes, and strategic behaviors 113
Table 5.1 Market entry strategies of case firms 130
Table 7.1 Proposed typology on modes of firm internationalization
based on mainstream and emergent perspectives 202
xiii
1
Introduction
The global business world has been witnessing a radical change over
recent decades. In the second half of the twentieth century, companies
from the United States of America (USA) and Western Europe—and
later Japan—dominated world markets for a long period of time. These
companies exported their products to world markets through strong dis-
tribution channels. They enjoyed scale economies and developed their
own brands. They engaged in foreign direct investment (FDI) in overseas
regions to establish new production bases and to reach new markets. They
successfully managed their global networks, utilizing their managerial
know-how, and became multinational enterprises (MNEs). However, this
dominant image of the developed country multinational enterprise (DC
MNE) seems to have disappeared. Emerging markets that mostly offered
raw materials, a cheap labor force, and new markets for DC MNEs began
to change the nature of competition in world markets from the last quar-
ter of the twentieth century. Despite their weak institutions, unstable
political and economic conditions, and immature markets, these coun-
tries have, in this century, succeeded in becoming the home countries
of rapidly growing companies (Demirbag & Yaprak, 2015). These firms,
referred to as emerging country multinational enterprises (EC MNEs),
have turned into successful challengers to DC MNEs. They successfully
© The Author(s) 2018 1

Y. Ayden et al., Turkish Multinationals, Palgrave Studies of Internationalization in
Emerging Markets, DOI 10.1007/978-3-319-57294-9_1
2 1 Introduction
compete not only in their domestic markets but also in the home markets
of their developed country counterparts. EC MNEs are not limited to
a few countries. They originate from various economies, such as China,
India, Brazil, Russia, Turkey, and South Africa amongst many others.
This new phenomenon has had a related impact on the academic com-
munity. In order to enhance our understanding of the nature of inter-
national business, scholars have undertaken numerous studies on many
aspects of EC MNEs. A significant amount of research relates to EC
MNEs (Deng, 2012; Filatotchev, Strange, Piesse, & Lien, 2007; Gubbi,
Aulakh, Ray, Sarkar, & Chittoor, 2009; Lu, Liu, & Wang, 2011; Luo,
2003; Luo & Rui, 2009; Luo & Tung, 2007; Madhok & Keyhani,
2012; Mathews, 2006; Meyer & Thaijongrak, 2012; Sun, 2009; Tsai &
Eisingerich, 2010; Yamakawa, Peng, & Deeds, 2008; Yiu, Lau, & Bruton,
2007). Indeed, this has been an important opportunity to test our current
knowledge about MNEs, which was mostly built on the experiences of
DC MNEs. Nevertheless, these studies seem to concentrate on specific
regions or companies emerging from these regions. Therefore, the findings
and contributions concerning the internationalization of EC MNEs are
mostly biased toward certain countries, while other emerging countries
remain under-researched (Jormanainen & Koveshnikov, 2012). In par-
ticular, these studies focus mostly on Asian companies, such as Chinese
and Indian MNEs, and on Latin American companies, such as Brazilian
MNEs. In their review article, Jormanainen and Koveshnikov (2012)
demonstrate that 30% of the published articles on EC MNEs in 14 top
international business journals between 2000 and 2010 focus solely on the
Chinese experience. Moreover, Chinese MNEs are included in the 26%
of the remaining articles on other EC MNEs. Indian and Latin American
MNEs constitute 14% and 12% of the geographic focus of the selected
articles respectively. Indian and Latin American MNEs constitute 14%
and 12% of the geographic focus of the selected articles respectively. For
this reason, more research from different contexts concerning EC MNEs
is required to develop a general picture of the phenomenon being studied.
This book aims to contribute to the international business field by
focusing on a different context: Turkey. Despite the increasing amount
of Turkish outward foreign direct investment (OFDI) and Turkey’s inter-
esting context as an OFDI sourcing country, studies investigating the
1 Introduction 3
internationalization of Turkish MNEs are few. Studies that attempt to

reveal Turkish MNEs’ entry modes (Demirbag, Tatoglu, & Glaister,
2009), their internationalization processes (Erdilek, 2008; Eren-
Erdogmus, Cobanoglu, Yalcin, & Ghauri, 2010; Yaprak & Karademir,
2010), their location choices (Demirbag, Tatoglu, & Glaister, 2010), and
the historical perspective of Turkish OFDI (Yavan, 2012) do exist. These
scholarly articles naturally focus on a certain aspect of the phenomenon.
There are no exclusive studies focusing on Turkish multinationals, apart
from some studies at the national level. Therefore, we aim to make a con-
tribution with our study in order to eliminate this deficiency.
In this book we aspire to depict the internationalization of Turkish
multinationals by focusing on a set of firms from a variety of industries.
We investigate the cases of 11 Turkish MNEs. There are two main research
questions which constitute the essence of this book. First, what drives
Turkish MNEs to internationalize? Second, how do Turkish MNEs run
their internationalization processes? In order to develop answers to these
questions we investigate the country-, industry-, and firm-level drivers
of the internationalization of Turkish MNEs and reveal their motives
for foreign expansion. Next, we examine their entry mode and location
choices. Based on our findings we identify four different trajectories of
Turkish MNEs’ international expansion in which they apply different
market entry strategies and follow different rationales. We then discuss
Turkish MNEs’ post-acquisition strategies, which are critical to their evo-
lution in their internationalization process. We also compare the findings
of this study to the mainstream and alternative perspectives to contribute
to the recent debate in the international business field about whether
existing theories and perspectives are adequate to explain the internation-
alization of EC MNEs.
In this book, we look at MNE internationalization from a strategic
management viewpoint (Melin, 1992; Welch & Welch, 1996). We use
three fundamental perspectives from the strategic management field: the
resource-based view (RBV) (Barney, 1991), industry-based view (Ind.
BV) (Porter, 1980), and institution-based view (Inst.BV) (Peng, Wang, &
Jiang, 2008). These three perspectives provide an all-inclusive theoretical
base to explore the driving forces of MNE internationalization (Gao,
Murray, Kotabe, & Lu, 2009; Lu et al., 2011; Peng et al., 2008). In
4 1 Introduction
other words, applying these three views to Turkish MNEs’ international-

ization may shed some light on the plurality of the observed phenomena
and allow us to develop a multilevel model accounting for the firm-,
industry-, and country-specific factors resulting in the heterogeneity of
EC MNE internationalization (Jormanainen & Koveshnikov, 2012). In
order to identify motives for OFDI, we apply Dunning’s classification in
which he identifies four distinct motives, defined as market-, resource-,
efficiency-, and asset-seeking FDI (Dunning, 1998). We also benefit
from the asset-seeking and asset-exploiting FDI categorization (Makino,
Lau, & Yeh, 2002) which further helps enrich our analysis.
Regarding the theoretical discussion, we use mainstream and emer-
gent international business theories as our research lenses to examine
MNE internationalization as a whole from different perspectives. In the
field, the eclectic paradigm (OLI framework) (Cantwell & Narula, 2001;
Dunning, 1980, 1988, 2000, 2001; Erdener & Shapiro, 2005; Narula,
2006, 2010) and the internationalization process model (IPM) (Clark,
Pugh, & Mallory, 1997; Forsgren, 2002; Johanson & Vahlne, 1977, 2009;
Meyer & Thaijongrak, 2012) are two prominent perspectives that are ref-
erenced to investigate firm internationalization. There exist, also, more
recent perspectives that focus particularly on EC MNEs. In our book, we
include two of these relatively new perspectives, the springboard perspec-
tive (Luo & Tung, 2007) and the linkage, leverage, learning (LLL) model
(Mathews, 2006), as additional research lenses to understand the inter-
nationalization of our case study firms. The rationale behind this choice
is that, among others, the springboard perspective and the LLL model
highlight the novelty of EC MNEs. Their contributions and arguments
are mostly commented on and discussed in recent work on EC MNEs
(Dunning, 2006; Erdilek, 2008; Jormanainen & Koveshnikov, 2012; Lu
et al., 2011; Luo & Rui, 2009; Meyer & Thaijongrak, 2012; Narula,
2006; Yamakawa et al., 2008; Yaprak & Karademir, 2010).
In terms of research methods, it is appropriate to apply case study
research which is justified by the research questions of this study. A
research design demonstrates the logical steps that are necessary to con-
nect the findings of any study to its initial research questions (Philliber,
Schwab, & Sloss, 1980; Yin, 2009). It shows the logical links between the
research questions and the conclusions by explaining and rationalizing
1 Introduction 5
the methods of the study. Case study research is suitable for research
projects seeking answers to “why” and “how” questions within the real
context of the investigated phenomenon (Eisenhardt, 1989; Eisenhardt
& Graebner, 2007; Rowley, 2002; Vissak, 2010; Yin, 2009). In addi-
tion, a useful strategy to discover areas in which current theories are
inadequate is to look deliberately for the situations in which the reality
appears to be strange or inexplicable (Ramamurti, 2012). Accordingly,
case study research offers an opportunity to look more closely at EC
MNE behavior in order to identify such unusual situations and to dis-
cover possible extension avenues for existing research (Siggelkow, 2007).
This study can be categorized as theory-driven research, since it aims to
extend existing internationalization theories and models by questioning
their explanatory power. In this context, qualitative data can offer better
insights about the complex social processes of MNE internationalization
than quantitative data can. On the other hand, it can also be categorized
within phenomenon-driven research since it discusses the importance of
EC MNE behavior. The lack of a plausible existing theory concerning the
phenomenon also satisfies the case study method. At this point, broader
research questions and a flexible research method are needed, which
further justifies the case study research (Eisenhardt & Graebner, 2007).
Therefore, we prepared and analyzed the cases of 11 Turkish MNEs that
have internationalized their operations through FDI. By analyzing the
qualitative data collected through executive interviews and documenta-
tion, we expect to reach our research outcomes to generate answers for
our initial research questions and contribute to the literature from a dif-
ferent context. We provide more details about our research method in
Appendix A.
Following this first introductory chapter, in Chap. 2 we provide a brief
history of the internationalization of the Turkish business context by dis-
cussing the changes in its institutional environment and market condi-
tions. We then discuss recent developments and new realities to describe
the current state of Turkish firms’ international operations. In Chap. 3, we
provide a literature review of the theoretical perspectives on EC MNEs
to which we intensively refer in our book. In Chap. 4, we examine what
these theoretical perspectives reveal regarding the internationalization
of Turkish companies by taking into account our findings from case
6 1 Introduction
studies. We provide an analysis of the drivers, motives, entry modes, and

location choices of our case study firms, enabling us to demonstrate the
internationalization trajectories of Turkish firms in the following chapter.
In Chap. 5, we describe the four different trajectories of Turkish MNEs as
market entry strategies. We provide examples and discuss the advantages
and disadvantages of each strategy. In Chap. 6, we specifically focus on
the post-acquisition strategies of case study firms, which are critical when
the internationalization of latecomer EC MNEs is under discussion. In
Chap. 7, we synthesize our discoveries to present a general picture of
our findings. We then compare these findings with the current literature
on EC MNEs from other contexts, such as MNEs from China, India,
and Latin America. Finally, we review what EC MNEs have added to
our knowledge of multinational enterprises and what potential research
avenues could be pursued in the future. At the end of our book we pro-
vide the details of our methodology and overviews of case study firms.
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2
Internationalization of the Turkish
Business Environment: Historical
Evolution and New Realities
1 Introduction
This book seeks to discover whether there is a pattern of difference in
the meaning of multinational enterprise (MNE) internationalization
between MNEs from advanced and emerging economies by examining
Turkish firms and their outward foreign direct investments (OFDIs) to
contribute to the recent debate in the business literature from a differ-
ent context. Thereby, a summary discussion of Turkey (as an emerging
country) and its background may play a critical role in understanding
the mentioned pattern difference and Turkish firms’ cross-border oper-
ations. Thus, this chapter focuses mainly on the country’s spectacular
transformation by emphasizing its characteristics, its advancement in
gross domestic product (GDP), and its trade and foreign direct invest-
ment (FDI) by presenting related statistics and examples from the busi-
ness world.
© The Author(s) 2018 11

Y. Ayden et al., Turkish Multinationals, Palgrave Studies of Internationalization in
Emerging Markets, DOI 10.1007/978-3-319-57294-9_2
12 2 Internationalization of the Turkish Business Environment...
2 Geography, Demography, and Economy

Turkey represents a unique case for researchers, with its idiosyncratic
location at the nexus between Europe and Asia, and with peripheral
proximity to the Middle East, North Africa, and the Commonwealth
of Independent States; its cultural heritage in the Ottoman Empire;
and its sui generis social structure—it is an Islamic but secular country
with a long history of democracy, unlike its Islamic counterparts, and
it is characterized by both Western and Eastern traditions, exercises,
rules, legal structure, and so on—all of which are also complemented
by strong economic and political relations with those regions (Erdilek,
2008; Yaprak & Karademir, 2011). Being a NATO member, a European
Union (EU) candidate, a member of the EU Customs Union, and party
to many economic agreements and regional economic integration orga-
nizations such as the Black Sea Economic Cooperation Organization, the
Economic Cooperation Organization, and the Organisation of Islamic
Cooperation, Turkey seems to be a liberal and open economy; yet this
was not always the case.
Prior to its period of radical transformation and transition (before
1980), Turkey was a closed economy with a low GDP and limited trans-
action amounts, trade, and investment volume with other parts of world.
This was also true of the country’s demographic statistics (low indigenous
population, low foreign population, etc.), yet, as with other factors, this
has changed over the years (Tatoglu & Demirbag, 2008).
Figure 2.1 shows the changes in Turkey’s population growth rate from
1980 to 2015. In 1980, the population was 43.9 million; by 2015, it had
risen to 78.7 million (Turkish Statistical Institute, 2017b). Nevertheless,
such rapid population growth (approximately doubling in 35 years) may
cause problems in terms of the unemployment rate and government
spending, and may cause urban sprawl due to rapid urbanization. It
may also benefit inward foreign direct investment (IFDI) volume based
on an abundance of labor (inherently cheap labor). From Fig. 2.1,
it can also be seen that, unlike total population, Turkey’s population
growth rate shows a steady decrease until 2010 and, although there is a
downward trend toward the end of the period covered, it later shows an
increasing trend. This may be a result of both government policies and
2 Geography, Demography, and Economy 13
statements from politicians encouraging people to have more children.

Furthermore, Fig. 2.2 shows the evolution of the country’s GDP and
GDP per capita numbers. By 2015, the country’s GDP had reached
$717 billion compared with $68.8 billion in 1980. The reason for this
huge change can be found in the proportionate changes in GDP dur-
ing the period—a dramatic decrease in agriculture, a strong increase in
services, and a moderate increase in industry, which leads to high added
Populaon Growth Rate Total Populaon

85 2.6
80
Millions
2.4
75 2.2
70
2
65
1.8
60
1.6
55
50 1.4
45 1.2
40 1
1980 1985 1990 1995 2000 2005 2010 2015
Fig. 2.1 Turkey’s population and population growth rate from 1980 to 2015.
Source: World Bank Database
GDP Per Capita GDP
$900 $12,000
Billions
$800
$10,000
$700
$600 $8,000
$500
$6,000
$400
$300 $4,000
$200
$2,000
$100
$0 $0
1980 1985 1990 1995 2000 2005 2010 2015
Fig. 2.2 Turkey’s GDP and GDP per capita. Source: World Bank Database
2015 8.5 26.5 65.0

2014 8.0 27.1 64.9
2013 8.3 26.6 65.1
2012 8.8 26.7 64.5
2011 9.0 27.5 63.5
2010 9.5 26.4 64.2
2009 9.1 25.3 65.6
2008 8.5 27.2 64.4
2007 8.5 27.7 63.7
2006 9.4 28.2 62.4
2005 10.8 28.5 60.7
2004 10.9 28.4 60.6
2003 11.4 28.6 60.0
2002 11.7 28.6 59.7
2001 9.9 30.2 59.9
2000 11.3 31.3 57.4
1999 11.5 33.2 55.3
1998 13.6 35.3 51.1
1997 15.0 31.9 53.2
1996 17.4 31.6 51.0
1995 16.3 33.2 50.5
1994 16.0 33.2 50.7
1993 16.1 31.1 52.8
1992 15.6 32.4 52.1
1991 15.8 32.7 51.5
1990 18.1 32.2 49.8
1989 17.1 34.0 48.9
1988 17.8 33.9 48.2
1987 18.5 32.5 49.0
1986 20.1 31.9 48.0
1985 20.3 27.1 52.6
1984 21.7 26.2 52.1
1983 21.4 27.2 51.4
1982 22.7 28.2 49.1
1981 24.5 27.1 48.4
1980 26.5 23.8 49.7
Agriculture (% of GDP) Industry (% of GDP) Services (% of GDP)
Fig. 2.3 Proportion of GDP over the years. Source: World Bank Database
value goods and services production (see Fig. 2.3). Likewise, GDP per
capita by 2015 had increased to $9126. Although fluctuations occur, it
is safe to say that both GDP and GDP per capita showed high perfor-
mance after the 2000s, which led to higher international trade and FDI
volumes. Therefore, by observing Fig. 2.2, it can be seen that Turkey’s
case might be examined in distinct periods, namely: the 1980s—the
Stable Period; the 1990s—the Fluctuant Years; and the 2000s—the Era
of Advancement, based on changes in the figures. Indeed, this catego-
rization parallels three turning points in the country’s economic and
political life: the January 24, 1980 Decisions; the Coalition Government
Periods of the 1990s; and the Economic Crisis in 2001 (to be discussed
in Sect. 2.2).
2.1 Before the 1980s
The early stages of industrialization in Turkey occurred in the 1930s

and were led by state-owned enterprises, yet these efforts were mainly
focused on light industrial production (Takım, 2011); indeed, large-
scale steps toward heavy industrial production were only taken
two decades later through the extensive use of Import Substitution
Industrialization (ISI) (Maxfield & Nolt, 1990). After World War II,
faced with many difficulties, Turkey welcomed US economic aid, and
in order to benefit more from such aid, economic policies based on
light industry and agriculture were later adopted with a goal of less
planning of the economy, that is to say, the application of liberal poli-
cies (early meetings regarding FDI were also held during this period,
from 1950 to 1960) (Saygın & Çimen, 2013). Yet with some changes,
the country pursued ISI policies during the period 1960–1980 (to
boost economic growth and development, create competitive indus-
tries, and increase economic well-being), led by the private sector and
with the help of government support, until a severe foreign exchange
crisis occurred in the late 1970s (the effects of the oil crisis in 1970 and
the heavy burden of the Cyprus Peace Operation also played impor-
tant roles in the upcoming change) and the benefits of ISI disappeared
(Baer, 1972). Consequently, Turkey inevitably undertook a drastic
change from ISI policies to outward-oriented and export-led policies
in 1980 (Günçavdı & Küçükçiftçi, 2005).
2.2 After the 1980s
The January 24, 1980 Decisions represent one of the most impor-
tant milestones in the history of the Republic of Turkey. To deal with
the problems that had arisen as a result of the ISI policies, the fixed
exchange rate system, and the ban on exports/imports, the country
established a set of neo-liberal policies, namely the January 24, 1980
Decisions,1 that included a system of free trade, policies to reduce the
importance of the government in the economic system, and a ban on
subsidies. With the help of these changes, Turkey soon became an
open economy with rising export and import volumes. Liberalizing
policies also led to a rise in IFDI stocks and flows and, as a conse-
quence, Turkish firms became more global and better able to com-
pete with those investing firms in a competitive environment. This
fierce competition also pushed Turkish firms to seek foreign markets
to lower costs and find new sales destinations for exports and OFDIs
(Erdilek, 2008).
By reducing stamp duty from 25% to 1% to liberalize imports,

removing quantitative controls on imports, using export incentives
and offering cheap (subsidized) credits, applying tax rebates, making
interest rate adjustments, and applying foreign capital incentives at the
beginning of the 1980s (Baysan & Blitzer, 1990), the Turkish economy
became more outward-oriented rather than inward-oriented, and thus
entered a new era. One of the significant steps in Turkey’s liberaliza-
tion came in 1989, with the issue of Decree No. 32—the Law on the
Protection of the Value of Turkish Currency—to ensure full mobil-
ity for trade and capital movements (Esen, 2000; Saygın & Çimen,
2013). Decree No. 32 enabled the Turkish lira to become a convertible
currency, leading to a significant increase in trade volumes and capi-
tal flows. However, these liberal policies were not the only reason for
the trade and investment boom during these years. The collapse of the
Soviet Union and the end of the Cold War in 1991 also had a huge
influence on the Turkish transformation, because with the collapse of
the Soviet Union, Turkic republics became sovereign states and con-
nections with these countries became possible. Figure 2.4 shows that
Turkey’s international trade performance was boosted in the 1990s,
and import and export volumes were doubled in comparison with
the 1980s; yet, observing Fig. 2.2, it seems that these steady improve-
ments in trade volumes did not have an effect on GDP during the
1990s. Moreover, it can be said that although trade volumes doubled,
the changes did not have a great impact on trade volumes during the
1990s due to poor initial policies in relation to the Turkic republics and
ineffective use of liberal policies. Therefore, real improvements were
not seen until the 2000s.
After the application of harsh liberal policies in 1980, Turkey’s GDP
was seen to have doubled between 1973 and 1985 (Eroğlu & Eroğlu,
2009); however, the effects of these policy changes on economic per-
formance were not significant toward the end of the 1980s (Günçavdı
& Küçükçiftçi, 2005) due to excessive amounts of current account
deficits following the rapid increase in import volumes, which was the
result of the removal of extensive customs taxes undertaken for pro-
cedural harmonization with EU procedures (see Fig. 2.4 for the rapid
increase in imports). In addition, near the end of the 1980s, export-
Total Export Total Import Rate of Exports Meeng Imports

Export (% of GDP) Import (% of GDP)
275 90
Billions
250
80
225
70
200
60
175
150 50
125 40
100
30
75
20
50
10
25
0 0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Fig. 2.4 Turkey’s international trade performance from 1980 to 2016. Source:
Turkish Statistical Institute Database
led growth policies started to fail because of policies designed to meet

foreign exchange needs, which were based on those increases in import
volume such as full liberalization of capital flows and strong incen-
tives for investments. In fact, during this period, Turkish incentives
were one of the most welcoming legislations in force. However, this
welcoming legislation created an excessive amount of capital flow as
a result of both incentive legislation and non-saturated market/sales
opportunities, and this flow later created a currency constraint, causing
the Turkish lira to become overvalued during the 1990s (Öz, 2007).
Yet macro indicators were not the only problem toward the end of
the 1980s and the beginning of the 1990s; politics was also affect-
ing the overall economic performance due to the lack of a political
leader and political uncertainty caused by protest votes by the public

in the early elections resulting from the unsuccessful administration of
the economy. The moment of transformation toward a positive eco-
nomic and political climate in the 1980s can be associated with Turgut
Özal. The leader of transformations in the 1980s, Turgut Özal became
the President of Turkey in 1989; after his tenure, political instability
ensued, which was related to the gap left behind in the wake of his
charisma in the eyes of the public. No successful leader emerged during
the 1990s and, as a result, seven coalition governments were formed
from 1991 to 2002 to deal with the economic and political instabil-
ity. However, economic performance was unable to progress beyond
certain goals because of this political uncertainty, and macro indicators
continued to worsen during these years. As a result of political failures,
overvalued Turkish lira policies, and the budget deficit, Turkey faced its
biggest current account crisis in 1994 and made a large devaluation in
the value of the Turkish lira (the value of the dollar doubled against the
lira) (Ülgen, 2005). What is important to emphasize here, as seen in
Fig. 2.2, is that Turkey’s import volume has been larger than its export
volume since the beginning of the 1980s (in fact, this has been the
case since 1947) (Turkish Statistical Institute, 2017c) and the country
has been facing current account deficits for many years. This result is
mainly related to high energy dependency, as well as processed raw
materials and intermediate goods needs (which can also be interpreted
as an export structure with a high import dependency) for export, and
although a high current account deficit is not a sustainable status, it
was sustained for many years by the pattern of change in investments
(hot money into IFDI). Thus, it can be said that IFDI and OFDI
stocks and flows have played a vital role in the country’s economic
performance, and they should be watched and interpreted carefully
over the years.
Although problems continued to arise among different branches of
the economy until the beginning of the 2000s, Turkey’s transformation
entered a new stage when it became part of the EU Customs Union in
1996, as a consequence of which the country lifted all customs taxes
for trade with the EU and started to apply the common EU tariff rates
to non-EU countries (Özkale & Karaman, 2006). This partnership
led countries to invest in Turkey due to the availability of cheap labor

and tax-free selling opportunities to the EU. Thus, the country’s IFDI
performance started to improve after 1996, especially after the estab-
lishment of political stability in 2003; moreover, rising competition
in the domestic market led Turkish firms to accelerate efforts toward
internationalization, to outsource, gain experience, and increase sales;
therefore, OFDI performance was also boosted (see Figs. 2.5 and 2.6).
However, rising capital flows led to the Turkish lira being overvalued
again, as in 1994, and macro indicators worsened by the end of the
1990s. In addition to fiscal and monetary problems, Turkey suffered
a disastrous earthquake on August 17, 1999, and these burdens led
to an economic crisis in 2001. The economic administration of the
country, which shifted the currency policy from a fixed to a flexible
exchange rate, made a new standby agreement with the International
Monetary Fund (IMF) (extended to 2008) and applied tight fiscal poli-
cies, taking the economic structure into a new era with tight controls
on the banking and financial sectors. When these changes met with
political stability (the end of the coalition period with the Justice and
$200 6.0
$180 5.5
5.0
$160
4.5
$140
4.0
$120 3.5
$100 3.0
$80 2.5
2.0
$60
1.5
$40
1.0
$20 0.5
$0 0.0
2001
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
IFDI Stock IFDI Flow

Share in World IFDI Stock Share in Developing Countries' IFDI Stock
Share in World IFDI Flow Share in Developing Countries' IFDI Flow
Fig. 2.5 Turkey’s IFDI performance over the years (billion dollars). Source:
UNCTAD Database
$50 2.0
$45 1.8
$40 1.6
$35 1.4
$30 1.2
$25 1.0
$20 0.8
$15 0.6
$10 0.4
$5 0.2
$0 0.0
1991
2002
1990
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
OFDI Stock OFDI Flow
Share in World OFDI Stock Share in Developing Countries' OFDI Stock
Share in World OFDI Flow Share in Developing Countries' OFDI Flow
Fig. 2.6 Turkey’s OFDI performance over the years (billion dollars). Source:
UNCTAD Database
Development Party government in late 2002), Turkey experienced a

sizable upturn in both trade (Fig. 2.4) and investment (Figs. 2.5 and
2.6). For instance, while the annual average export increase was 8.8%
during the 1990s and 10.6% from 1996 to 2003, it rose to 15.3%
over the period 2004–2011; furthermore, while the annual IFDI stock
increase rate was 10.3% during the period 1992–2003, it doubled in
the years between 2004 and 2015, with a rate of 20.8%, and the IFDI
flow increase rate rose to 38.4% in the period from 2004 to 2015—
this had been 22.5% during the period 1992–2003; finally, the annual
OFDI stock rate increased to 18.6% during the period 2004–2015,
from 15.2% in the years between 1992 and 2003, while the annual
OFDI flow increase rate decreased by 31% for the years between 2004
and 2015, from 70.6% during the period 1992–2003 (Demirbag,
Tatoglu, & Glaister, 2007; UNCTAD, 2017).
As seen in Fig. 2.4, changes in the political and legal climate boosted
exports and imports, leading the shares of exports and imports in the
GDP to increase, yet this change was not balanced. During the years
between 2004 and 2011, the average annual increase in exports was less
than the annual increase in imports (the increase in exports was 15.3%,
as noted earlier, while the increase in imports was 19%). This could be
related to the structure of exports, low currency and rising import oppor-
tunities, import tendencies, or the need for some goods to be imported.
Whatever the reason, although there was a global crisis in 2008, Turkey
experienced rapid growth in imports, and in 2013 it set an all-time record
of $251.7 billion in imports, whereas an all-time record for exports was
set in 2014 with $157.6 billion (Turkish Statistical Institute, 2017c).
Nevertheless, although it was substantially improved by new policies
following the 2001 economic crisis, the country’s business environment
remained unstable (even worsening after 2013) and has been difficult
to operate in for decades, and it appears that such unfavorable condi-
tions continue to exist (Erdilek, 2008). Further to these instability issues,
Turkey also has high basic costs for such items as energy, utilities, and
taxes, which increase the cost of production and negatively affect firm
competitiveness (Eren-Erdogmus, Cobanoglu, Yalcin, & Ghauri, 2010).
The combination of all these problems may explain the increase in imports
over exports; however, it does not explain the IFDI pattern in the country
(see Fig. 2.5). Figure 2.5 indicates that Turkey, as a successful develop-
ing country, attracted a huge amount of IFDI stock during the period
2004–2015. While in 2003 the amount was $33.2 billion, it reached the
highest rate of all time, $190.2 billion, at the end of 2012; the IFDI flow,
which was $1.7 billion in 2003, reached its highest rate of $22.0 billion
in 2007. The country’s popularity as an IFDI destination can be seen in
the shares of investments both in developing countries and elsewhere
around the world. In 2003, Turkey’s share of world IFDI stock was 0.4,
rising to 0.9% by the year 2010; furthermore, its share of world IFDI
flow rose from 0.3% to 1.5% at the end of 2006. Likewise, the country’s
share of developing countries’ IFDI stock and flow has increased since
2003 (in 2003 its share of developing countries’ IFDI stock was 1.8%
and that of IFDI flow was 0.9%; they reached their highest point of all
time respectively in 2007 at 3.7% and in 2006 at 5.3%). However, it
seems the country has not maintained that performance, as numbers in
trade and IFDI have been decreasing in recent years. It should be noted
that, contrary to these shifts, OFDI statistics have continued to increase.
After 2003, competition in the Turkish market reached a new stage:

the rising rate of imported goods and IFDI due to erosion in the domes-
tic market as a result of openness and liberalizing policies have over the
years constrained opportunities to seek new markets. Moreover, not only
domestic motivations but also the rising pressure of globalization and
global competition have pushed Turkish firms to accelerate their inter-
nationalization processes (Aybar, 2016). Economic improvements in the
Turkic republics, strengthening relations with Arab countries, and rising
investments in the EU have led Turkish firms into a new era, and the
increasing international operations since 1990 have been boosted since
2003. During the period 2004–2015, Turkish firms made many OFDIs
(as seen in Fig. 2.6). These investments have increased Turkish firms’
global competitiveness.
Today Turkey has the 17th largest economy in the world, and by
2016 its export volume was calculated at $129.8 billion, with an import
volume of $180.2 billion; IFDI stock was $145.5 billion (a decrease of
$45 billion) and IFDI flow was $16.5 billion (a decrease of $5.5 billion);
OFDI stock was $44.7 billion and OFDI flow was $4.8 billion.
According to information released by the Turkish Statistical Institute
(TSI), in 2016 the EU was the biggest exporting and importing part-
ner of Turkey, with a 48.3% share of total exports and a 39.1% share
of total imports (Turkish Statistical Institute, 2017c). This can be
interpreted as the inevitable result of being a part of the EU Customs
Union. Table 2.1 recreates the country-based distribution from the
Table 2.1 Turkey’s leading exporting and importing partners in 2016

Top exporting partners in 2016 Top importing partners in 2016
Germany $12,818,470,441 China $23,578,209,927
UK $10,911,165,681 Germany $19,659,226,888
Italy $6,897,623,949 Russia $13,808,703,609
Iraq $6,850,151,955 USA $10,057,215,420
USA $6,008,177,852 Italy $9,316,630,656
France $5,463,098,183 France $6,487,537,179
UAE $4,646,652,257 South Korea $5,946,640,362
Iran $4,635,498,655 Spain $5,942,095,997
Spain $4,565,214,977 India $5,278,101,246
Source: Turkish Statistical Institute Database
TSI statistics, highlighting that Germany is the leading exporting part-

ner of Turkey, with a $12.8 billion total export volume. Germany is
followed by the United Kingdom (UK) at $10.9 billion and Italy at
$6.9 billion in total exports. When the import volumes are analyzed,
China is the country’s leading importing country, with $23.6 billion in
total import volume. China is followed by Germany at $19.7 billion
and Russia at $13.8 billion. Table 2.1 further highlights that half of
the top ten exporting partners are comprised of EU countries; there-
fore, it is safe to say that the EU is of great importance in Turkey’s
economic performance.
While the numbers are important when emphasizing import/export
performance, the content is also significant. Thus, Table 2.2 illustrates the
content of Turkey’s imports and exports in 2016. According to Table 2.2,
the country’s leading exporting product, at $17.8 billion, is vehicles,
parts, and accessories (Turkish Statistical Institute, 2017a). As a natural
outcome of extensive automotive production, it is not surprising to see
vehicles at the top of the list (this has been constant since 2004 except
in 2012); brands such as Mercedes, FIAT, Hyundai, Toyota, Ford, and
others have been investing in the country for many years. However, it is
surprising that, in 2016, precious metal was the country’s second most
exported product (machinery is traditionally the second most exported
product, but in 2016 it dropped to third by a small margin) with an
export volume of $11.4 billion. A surprising result can also be seen in
top imported products, to the extent that machinery was the leading
product in 2016 with an import volume of $24.9 billion, unlike in previ-
ous years (mineral fuels/oils had been the leading product since 2000).
Mineral fuels/oils is the second most imported product, with a volume
of $24.3 billion, followed by electrical machinery and equipment at
$18.5 billion. On the other hand, these import results are not surprising
given Turkey’s well-known lack of energy and spending on investment
goods for many decades.
It is important to mention here, before talking about Turkey’s IFDI and
OFDI performance, that the data of the United Nations Conference on
Trade and Development (UNCTAD) and the Central Bank of the Republic
of Turkey (CBRT) differ in terms of FDI statistics. For instance, the CBRT
records Turkish IFDI stocks released as $141.5 billion in 2015, whereas
Table 2.2 Turkey’s leading exporting and importing products in 2016

Top exporting products in 2016 Top importing products in 2016
Vehicles; other $17,775,254,355 Nuclear reactors, $24,946,566,763
than railway or boilers, machinery,
tramway rolling and mechanical
stock, and parts appliances; parts
and accessories thereof
thereof
Natural, cultured $11,369,172,471 Mineral fuels, $24,304,048,762
pearls; precious, mineral oils, and
semi-precious products of their
stones; precious distillation;
metals, metals clad bituminous
with precious substances; mineral
metal, and articles waxes
thereof; imitation
jewelry; coin
Nuclear reactors, $11,314,709,074 Electrical machinery $18,492,116,358
boilers, machinery, and equipment and
and mechanical parts thereof;
appliances; parts sound recorders
thereof and reproducers;
television image
and sound recorders
and reproducers,
parts, and
accessories of such
articles
Apparel and $8,166,746,499 Vehicles; other than $16,067,180,822
clothing railway or tramway
accessories; knitted rolling stock, and
or crocheted parts and
accessories thereof
Electrical machinery $7,012,405,271 Iron and steel $11,573,536,485
and equipment
and parts thereof;
sound recorders
and reproducers;
television image
and sound
recorders and
reproducers, parts,
and accessories of
such articles
Source: Turkish Statistical Institute Database
UNCTAD records them as $145.5 billion. Likewise, Turkish OFDI stocks

are recorded as $30.6 billion by the CBRT, whereas UNCTAD records
them as $44.7 billion. However, this is a common problem for both
developed and developing countries. It is known that official numbers are
always lower than those declared (Erdilek, 2007). For an examination of
the reasons for this difference, please refer to the work of Bakır (2016). The
aforementioned statistical difference can be seen in the OFDI’s develop-
ment part of the study during the period 2004–2015 and statistics about
branches of OFDI stock in later sections. While it is reported as $849 mil-
lion by the CBRT, food, beverage, and tobacco OFDI stock should be
much higher than this number due to the large investments of Yıldız
Holding and Anadolu Efes. However, UNCTAD’s statistical database does
not allow the researcher to undertake deep analysis of destinations and
compositions of OFDI stock. Hence, although UNCTAD’s database is
consistent when compared with the CBRT statistics, the CBRT data were
used in Figs. 2.7 and 2.8 and in Tables 2.3 and 2.4.
Others
30% Netherlands
37%
Azerbaijan
12%
Malta
5%
Russia
2%
Austria
UK Luxemburg Germany 4%
3% 3% 4%
Fig. 2.7 Leading OFDI destinations in 2015. Source: Central Bank of the Republic
of Turkey Database
Netherlands
Others 18%
26%
Austria
6%
Azerbaijan
5%
Germany
10%
Gulf
Countries
6%
Luxemburg
Russia 6%
Spain France UK
5%
6% 5% 7%
Fig. 2.8 Leading IFDI destinations in 2015. Source: Central Bank of the Republic
of Turkey Database
As can be seen in Fig. 2.7, more than half of Turkey’s OFDI stock
in 2015 was bound for the EU according to CBRT statistics; 37% of
the total OFDI stock seems to be bound for the Netherlands due to its
legal privileges and agreements with many countries (Arolat, 2012). It
is followed by Azerbaijan, with a share of 12% from total OFDI stock.
Like the Netherlands, Azerbaijan has some special agreements with
Commonwealth of Independent States countries, and thus it appears to
be an open gate for these countries, which explains Azerbaijan’s rising
share in Turkish OFDI stock. These two countries are important to show
Turkey’s general OFDI pattern concerning destinations. In 2015, 68%
of the country’s OFDI stock was bound for Europe, while 14% of the
total OFDI stock was bound for Turkic countries, although this is not
shown in the figure explicitly (CBRT, 2017). If the status of Azerbaijan
and the Netherlands is considered, it can be said that Turkey’s OFDI
transactions are more closely related to market-seeking activities than to
lowering production costs, as is the case for many firms from developed
Table 2.3 Composition of OFDI stock in 2015

Factors 2013 2014 2015
Agriculture 8 12 4
Industry 7890 11,080 8350
Mining and Quarrying 4449 7366 4017
Manufacturing 2944 3176 3735
Manufacture of Food Products, Beverages, 1053 1087 849
and Tobacco Products
Manufacture of Textiles and Wearing Apparel 663 661 691
Manufacture of Basic Pharmaceutical Products 383 412 685
and Pharmaceutical Preparations
Electricity, Gas, Steam, and Air Conditioning 495 538 592
Supply
Water Supply; Sewerage, Waste Management, 2 0 6
and Remediation Activities
Services 22,020 22,846 22,294
Construction 251 247 602
Wholesale and Retail Trade; Repair of Motor 936 734 1016
Vehicles and Motorcycles
Transportation and Storage 447 514 56
Accommodation and Food Service Activities 457 458 354
Information and Communication 1404 1578 2823
Financial and Insurance Activities 16,996 17,714 16,280
Real Estate Activities 671 772 824
Administrative and Support Service Activities 279 253 119
Other Service Activities 287 290 133
Unclassified 0 0 0
TOTAL 29,918 33,938 30,648
Bold values denote the total value
Source: Central Bank of the Republic of Turkey Database
countries. This market-seeking motive can be seen in Table 2.3 as well

and in some studies related to Turkish OFDI motives (Aybar, 2016).
When Fig. 2.8 is analyzed, the EU’s importance for Turkey becomes
more visible. According to the statistics, by 2015, 80% of the country’s
IFDI stock came from Europe, with over 70% of total IFDI stock com-
ing from the EU alone (CBRT, 2017). In view of these statistics, it can
be said that neither Turkey’s OFDI nor its IFDI stocks are diversified in
terms of geography and, to achieve a better performance in investment,
the country should diversify the destinations by using different incentives
for different parts of the world to invite IFDIs and support its firms to
invest in unusual destinations to boost OFDI.
Table 2.4 Composition of IFDI stock in 2015

Factors 2013 2014 2015
Agriculture 807 1067 726
Industry 63,054 78,582 64,925
Mining and Quarrying 3498 3620 2663
Manufacturing 46,525 57,813 47,484
Manufacture of Food Products, Beverages, 11,160 12,309 10,751
and Tobacco Products
Manufacture of Coke and Refined 3545 3948 7094
Petroleum Products
Manufacture of Basic Pharmaceutical 4801 6065 5258
Products and Preparations
Manufacture of Motor Vehicles, Trailers, 9995 12,949 9034
and Semi-Trailers
Manufacture of Basic Metals and 2119 4427 2178
Fabricated Metal Products
Manufacture of Non-Metallic Mineral 2489 2793 2052
Products
Electricity, Gas, Steam, and Air Conditioning 12,946 17,063 14,727
Supply
Water Supply; Sewerage, Waste 85 86 51
Management, and Remediation Activities
Services 79,614 95,153 75,840
Construction 875 981 730
Wholesale and Retail Trade; Repair of Motor 16,618 22,535 21,750
Vehicles and Motorcycles
Transportation and Storage 2096 3453 2108
Information and Communication 20,528 22,991 14,706
Financial and Insurance Activities 33,509 38,430 30,998
Real Estate Activities 1332 1016 1041
Human Health and Social Work Activities 1059 1600 1397
Administrative and Support Service Activities 2108 2234 1588
Other Service Activities 744 859 647
TOTAL 143,475 174,802 141,491
Bold values denote the total value
Source: Central Bank of the Republic of Turkey Database
While Turkey’s OFDI stock is rising, it is important to analyze its com-

ponents since these reveal more information about the Turkish OFDI
pattern. According to Table 2.3, the country’s service investment is more
than twice its industry investment. This can be interpreted based on the
fact that Turkish firms keep their production facilities in Turkey or do not
have enough power to compete in global markets in terms of industrial
production. From Table 2.3, we can see that the most invested sector in
OFDI in 2015 was financial and insurance activities, followed by min-
ing and quarrying, and manufacturing respectively. As an important
aspect, manufacturing has several subcomponents, among which food,
beverages, and tobacco is the leading subtitle, followed by textiles and
wearing apparel, then basic pharmaceutical products. Important to note
here is that a subcomponent of services, information and communica-
tion, was a rising trend for several years (numbers doubled in two years)
(CBRT, 2017). When the low levels of infrastructure in newly developing
Turkic republics, and in some Balkan and Arab countries, are considered,
advances in the telecommunications sector may lead to new opportuni-
ties for Turkish firms and, in future, higher OFDIs may be seen in this
sector.
Though OFDI statistics are important for the sake of Turkish firms,
IFDI statistics are also important for the well-being of Turkey and the
Turkish people. Thus, IFDI statistics should be examined carefully in
order to understand and analyze their evolution. Perhaps what is most
important to emphasize here is the decrease in IFDI stock: although it
was $190.2 billion at the end of 2012, it fell to $141.5 billion by 2015.
This huge drop may or may not be related to political instability, yet
foreign investors’ risk perceptions about the country shifted after 2012.
Another implication of Table 2.4 can be found in the sharp decrease in
financial and insurance activities. This drop can be interpreted as the
result of a decline in financial trust in Turkey, which may lead to a lack of
credit or an increase in interest and possibly an increase in costs. Another
interesting point can be seen in the statistics concerning manufacturing:
by 2015 the total volume of manufacturing was $47.5 billion, having
decreased by more than $10 billion from the total volume of $57.8 bil-
lion in 2014.
As a summary of all these statistics, it can be said that although Turkey’s
export and OFDI performances have been improving since 2003, they
are still much lower than import and IFDI performances. Therefore, the
country is still facing a current account deficit that is exerting a huge
amount of pressure on its economic outlook. However, rising IFDI can
be assumed to be a bigger problem since it has a negative effect on the
industrial development of domestic firms. Yet a more significant problem
to address here is the decreasing trend in both IFDI stocks and exports in
recent years. This trend may lead to an economic recession, higher unem-
ployment, lower growth, or even worse effects. Moreover, a rise in OFDI
stocks can be interpreted as action to prevent problems in the domestic
market which affects IFDI stocks. Whatever the reason, Turkey needs to
take precautions to overcome the bottleneck that it has experienced in
recent years.
This chapter is concerned with the internationalization of the Turkish
business environment. The following chapter provides a critical review of
the literature on the internationalization of firms by discussing the argu-
ments of mainstream and emergent perspectives.
Notes
1. The origin of this package is based on the Washington Consensus, which
was the solution for the main economic problems of developing countries
proposed by the USA, the IMF and the World Bank. The main branches
the solution focused on included financial discipline, public spending, tax
reform, interest rate adjustments, new foreign exchange policy, free trade
regime, bans on foreign capital control, privatization, deregulation, and
assuring ownership rights (Soyak & Eroglu, 2008).
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CHAPTER V.
EXPELLED.
The next morning, leaving Madeline at the station to follow by a

later train, Mr. Wynne called at Harperton, in order to have a little
explanation. The maid’s face (she was an old maid) looked
portentously solemn as she opened the door; and—oh! ominous
objects!—two good-sized basket trunks, and a bonnet-box, stood
waiting in the hall. As he glanced at them in passing, some one
came out through a door just behind him, and said, in a biting tone—
“Dear me! I am surprised to see Mr. Wynne under the
circumstances; but, as he is here, perhaps he can give an address
for Miss West’s boxes?”
“May I ask what you mean, Miss Selina?” he said, turning to
confront her the instant the drawing-room door was closed.
“I mean,” she replied, flushing to a dull brick colour, “that after her
escapade of last evening, Miss West never enters this house again
—a young lady who stayed out all night!” she concluded with a wild,
dramatic gesture.
“But, you know, that was not her fault, Miss Selina. We waited
exactly where you told us—at the bottom of the steps—and so
missed the train. I could not get a cab, though I did my utmost, the
snow was too deep. I left Miss West at the Railway Hotel and
brought her from there this morning. She——”
“Oh,” interrupted his listener, throwing up both hands, “pray spare
me the details! It is nothing to me whom she was with, or where she
went. We have quite done with her. It was a planned thing between
you, no doubt.”
“Miss Selina,” cried Mr. Wynne, “your sex protects you! A man
dared not say what you have permitted yourself to utter, and do not
in your own heart believe. Am I to understand that because, through
waiting for you, by your own express direction, Miss West lost her
only train home last night, and was obliged to remain in Riverside,
you would blast her reputation, and thrust her out of doors?”
“You are!” she returned, defiantly, looking him full in the face with
her cold, cruel, little eyes.
“And may I ask what is to become of the young lady?” he inquired,
with a forced calmness that was ominous enough.
“Nay,” shrugging her shoulders, “that is a matter between her and
you.” Then she added, with an evil smile, “She need not refer to us
for a character.”
“Perhaps your mother will be more lenient,” he said, making a
great effort to restrain his temper. “Remember that Miss West has no
home and no friends. Can I see Mrs. Harper?”
“I am speaking for my mother,” she answered sharply. “She
refuses to see the girl, or allow her inside our door. There is no use
in your persisting—it is waste of time. We are not rich, but, at any
rate,” choking with excitement, “we have always been respectable!”
“I am delighted to hear it,” he replied, making a low, ironical bow;
“and as there is nothing further to be said, I will wish you good
morning.”
“Good morning!” replied Miss Selina, ringing the bell, and
curtseying simultaneously. “You will be pleased to remove Miss
West’s boxes at once, and inform her that letters from her will be
returned unopened”—thereby securing the last shot, and the last
word. And Mr. Wynne walked out of the house in a bewildered and
confused state of mind, outwardly cool, but in reality at boiling point.
He had not proceeded far when he met Madeline coming towards
him, with a terrified and expectant face. Now was the moment for
action. His senses were stung to alertness, his mind cleared of
misgivings; he made a desperate resolve. She was thrust out
homeless and alone in the wide, wide world! She should share his
home, such as it was; it was better than none. She should, an she
would, be his wife—and rich in love if in nothing else. Prudence had
hitherto sealed his lips—for her sake chiefly. Now that she had no
resources, no place open to receive her, he could and would speak.
The first thing he did was to hail a cab, and despatch the man
straight back to Harperton for Miss West’s luggage, desiring him to
bring it to the station.
“Why, what does it mean? Are they so very angry?” she asked
with blanched cheeks. “Oh, you don’t mean that they are sending me
away?” For she noticed that Mr. Wynne looked unusually pale and
grave.
“Come down here with me,” leading her into some public gardens
that they were passing, “and I will tell you all about it.”
The gardens were miserably wintry. Snow lay on the ground, a
couple of boys were snowballing, some starving red-wings fluttered
across the path, a granite-grey sky lowered overhead. Surely it was
the last place on God’s earth in which to relate a love tale; and the
girl herself, what a picture of misery! Oh! thought the young man, if
Mrs. Wolferton had but been at home—but, alas! she was abroad—
she would have been a true friend to this poor forlorn child. Madeline
was, of course, wearing her evening dress, such as it was—at any
rate, it was thin. A shabby little plush opera cloak barely covered her
perishing neck and arms. Over this was drawn a meagre black cape.
On her head she wore a sunburnt sailor hat; in her frozen, mittened
hand she held a fan; her face was pinched with cold, and white with
anxiety. No lovely lady-fair was here to woo this bleak January
forenoon. And what of ambition—the stern, jealous mistress to whom
he was pledged?
“They are very angry, senselessly angry,” began the young man.
“They won’t take you back again, and have actually packed your
boxes ready for removal. However, when one door shuts, another
opens. There is a home ready for you, Madeline. Can you guess
where it is?”
She gazed at Mr. Wynne, and stood perfectly still and very white,
with her thin, sensitive lips tightly pressed together, and made no
reply.
“You know that it is my home,” he continued eagerly. “I need not
tell you that I love you, and so well do I love you, that until now I
have never dared even to whisper my love. I am poor, I have my way
to make as yet, it may be a life of struggling poverty. Can you share
it—will you venture, Madeline?”
The girl stepped back a pace, and suddenly sat down upon an iron
garden bench, still silent, and covered her face with her mittened
hands.
“Will you not answer me!” he pleaded. He dared not remove her
hands, or offer her a caress. The snowballing had ceased; the
present scene in real life attracted the two boys, who had drawn
near. The lady was sick, or looked like it.
“You do not mean it,” she faltered. “I know you are very, very kind,
but I cannot accept your pity, for that is what it comes to.”
“I solemnly declare to you that it is not,” he rejoined with emphasis;
“but even if it were, have you not heard that pity is akin to love?”
“It is utterly impossible,” she said slowly. “You are speaking out of
the goodness of your heart, on the impulse of the moment. This time
yesterday, tell me honestly,” raising her lovely eyes to his, “had you
any intention of—of—of this?”
“To be truthful, then, I had not.”
“There, you see, that is enough. There is your answer,” with a
quick little gesture.
“No, no, hear me out. It was on your account that I held my
tongue. If I had had a decent income I would have spoken to you
long ago; but I felt that I had no right to remove you from Mrs.
Harper’s care without having a comfortable home to offer you. I
meant to work very hard and to return next year. Now all has been
changed. Circumstances alter cases. I ask you now, Madeline, will
you be afraid to begin with me at the bottom of the ladder—
something tells me that I shall reach the top?”
“I shall only be a dead weight and a burden,” she replied in a
broken voice. She was relenting. Her own heart was an eloquent
advocate for Mr. Wynne.
“What will your relations say when they hear that you wish to
marry a portionless girl, a—beggar?” she murmured tremulously.
“They will say nothing that can affect us. I am independent. I have
no claims on them, and they have no right to dictate to me. By the
time they hear the news, we shall, I hope, be married. We have
nothing to wait for, and the sooner you have a home of your own the
better. I wish I had a sister or some near relative that I could take you
to, but I am almost as much alone in the world as you are.”
In the end Mr. Wynne prevailed—was not talking his trade?—and
Madeline West walked out of that wintry white garden his affianced
wife.
Rash young man! Rash young woman! One would have thought
that they had the wealth of Crœsus, the full consent and warmest
wishes of tribes of wealthy relations, to look at their faces as they
passed through the gates side by side.
Miss West did not feel the snow soaking through her thin walking
shoes. No, she was treading on air—had thrown all doubts and
misgivings to the winds, and was prepared to make the most of this
heaven-sent period. She was about to enter on a new and happy life,
believing that, although a poor man’s wife, her path would be strewn
with roses.
She had about as much practical experience of household cares—
the value of pounds, shillings, and pence—as one of the children in
the third class at Harperton. As for Laurence Wynne, Madeline was
his, Madeline was an angel, young, unspoiled, and unsophisticated,
with modest wishes, and a firm faith in him. Their future was before
them! It was!
CHAPTER VI.
“POVERTY COMES IN AT THE DOOR.”
In a very short time Madeline West was Madeline Wynne. She

was married at a little old church in the City, with no other witnesses
than the verger and the clerk; and Mr. and Mrs. Wynne spent a week
in Paris ere they set up housekeeping, in modest lodgings not far
from the Temple, and from which, by leaning well out of the drawing-
room window, and nearly dislocating your neck, you could obtain a
glimpse of the Thames Embankment.
The good old days, when Traddles and Sophy lived in chambers,
and entertained half a dozen of “the dear girls,” were no more. Mr.
Wynne was obliged to set up his little tent outside the venerable
precincts, in the second floor front of Solferino Place. To Madeline it
was a palace, because it was her very own. Here she might poke the
fire, alter the arrangement of the furniture, pile on coals, order tea at
any time, and go out and come in as she pleased. She could
scarcely realize such liberty! Neither could she realize her wedding-
ring, and she frequently stared for a moment in doubt when she
heard herself called “Mrs. Wynne.”
Laurence was not so poor as she imagined, for he hired a piano,
bought her songs, flowers, and—oh! joy—three such pretty new
dresses; he took her to the theatres, for walks in the parks (when he
had time), he showed her most of the sights of London—St. Paul’s,
Westminster Abbey, the National Gallery, and the Tower.
He was even extravagant in one line. He laid out for her a reckless
amount of shillings and half-crowns on literary papers, magazines,
and books. Laurence was fond of reading; she was not, and she little
knew how she startled him when she exclaimed, “Besides all the
other hateful things you have delivered me from, Laurence, you have
delivered me from books! I never wish to open one again!”
Now Laurence had been looking forward to introducing his pretty
Madeline to all the great masters in English literature, to hearing her
fresh comments, to sharing her raptures, to comparing first
impressions, favourite pieces, favourite characters; in short, to
opening for this girl of eighteen the portals of a new world. Alas! it
soon became evident that Madeline had an absolute lack of literary
taste. She had a taste for music, for flowers; a marvellous taste in
colours, and in dress; but for reading, as he understood it, not an
atom. (At first he had had visions of reading her some sketches and
articles of his own, but soon changed his mind, and kept his MS. in
his writing-desk.) He read aloud well, and selected, as he believed,
gems; but, unfortunately, Mrs. Wynne preferred paste!
Lamb’s essays were “quite too awfully dry.” Wordsworth was ten
times worse—she could hardly stifle her yawns. And even when he
was reading “Silas Marner,” and, as he considered, George Eliot’s
masterpiece, he noticed that Madeline was shyly perusing the
advertisements in a ladies’ newspaper. She looked so nonplussed
and unhappy if he paused and suddenly asked her, “If that was not
fine? and how such and such a passage struck her?”
At length he relinquished his efforts. It was time, when Madeline,
with a pretty pout, said, “My dear Laurence, I might as well be at
school; you are just talking like Mr. Falk, our professor of English
literature. Such an ugly little mummy.”
“And to whom you never listened?”
“Not I; and I never could remember names, periods, or dates. You
must make the best of me. In some ways you will find that I am
hopelessly stupid.”
In spite of these tiresome readings, Madeline was thoroughly
happy; there was not one single drawback, not one little cloud on her
sky, if we except an occasionally heavy magazine article to which
she was obliged to lend her ears. And Laurence was happy too. It
was delightful to come home those dark, wet nights, and find a kiss,
a blazing fire, and his pretty Madeline awaiting him. She was always
smiling, always so ready to see the comic side of everything, a
veritable sunbeam in that drawing-room.
“Who would be a bachelor?” he asked himself contemptuously, as
he watched her flitting to and fro after dinner, pulling up his armchair
and filling his pipe. If he had one little arrière pensée, it was this, that
she would not always give him mutton chops, and a wish that her
ideas of a menu were a little more expansive.
Nevertheless he was perfectly content. He had an incentive to
work hard now, and he did work. He was getting known in a small
way. He had the gift of oratory, of what is known as legal tact, a
handsome presence, and the power—given to so few—of swaying
men’s minds with his eloquence, as the flame of a candle in the
wind. But, then, he was only twenty-eight—a mere boy in the eyes of
the ancient profession, where a man begins to make a start about
fifty. Still Laurence Wynne had his foot on the lower rung of the
ladder. More than one shrewd solicitor had noted him. His luck had
turned; his marriage had brought him good fortune, though it had
scared away all his relations, and he had completely dropped out of
society.
But this fool’s Paradise was not to last—it never does. The angel
that opened the gate, and drove the foolish pair out into the
everyday, hard, stony world was typhoid fever.
The hot summer succeeding their marriage was a trying one, and
in the sultry September days typhoid fever laid hold on many victims,
among others on the hard-working young barrister—seized him with
a death-like grip, flung him on a sick bed, and kept him there for
months.
The fever was so difficult to shake off, and it had brought so many
other ills in its train. Finances were low—as they are sure to be when
the bread-winner is idle. Doctors’ bills and chemists’ bills were
mounting up, as well as the butcher’s and baker’s, not to speak of
the landlady’s little account.
All the burden now lay upon one pair of young shoulders—
Madeline’s; and, to quote a homely but expressive phrase, she
absolutely did not know where to turn. She had neither money nor
friends. Her husband had no capital; his slender fortune had been
invested in his education and profession. And as to his friends and
his distant connections, they had disowned him. When they had
heard of what they were good enough to call “his low marriage with a
teacher in a school,” they had washed their hands of him with
wonderful unanimity. Society had lost sight of him for months; Mr.
and Mrs. Wynne had no acquaintances. Poor Madeline was in
terrible straits, but her courage rose with the occasion; she was
brave and energetic, and did not sit down with her hands before her
and cry.
A schoolfellow of her husband’s (another young barrister) came to
see her and him, and gave help in the shape of advice, which for
once was valuable. They moved to the top story—the attics. (That
was a step of which their landlady highly approved.) And he
procured some law copying for Madeline—who wrote a clear, neat
hand—which brought in a few shillings, and kept the actual wolf from
the door. He sent fish, grapes, and other little delicacies to the
invalid, and was in truth that rara avis—a friend in need.
He considered that Wynne had behaved like a madman in
marrying on nothing; but certainly the girl was an immense
temptation—so young, so pretty—such eyes he had never seen—so
unsophisticated and fresh, and yet possessing excellent sense and
an elastic and dauntless spirit. Here for once was an instance in
which poverty had not thrust love out of the window. Strange, but
true, their reverses had only served to draw the Wynnes more
closely together. They afforded a refreshing study to Mr. Jessop, who
was a cynic and a philosopher in a small way, and who sneered and
snarled and marvelled. Things had not even come to the worst with
these unfortunate people, not until a third was added to the
establishment in the shape of a Master Wynne, who puckered up his
wrinkled red face, thrust his creasy fists into his eyes, and made
hideous grimaces at the world in which he found himself—and in
which, to tell the truth, he was not particularly wanted, except by his
mother, to whom he was not only welcome, but, in her partial eyes, a
little household god!
His father, who was slowly recovering—an emaciated spectre of
what he had been—was dubious with regard to the striking
resemblance to himself, and frequently wondered in his inmost soul,
as to what was to be the future of his son and heir? How was he to
be fed, clothed, and educated? Dismal echoes answered, “How?” for
the Wynnes were now desperately poor.
I mean by this, that Mr. Wynne’s watch had long been ticketed in a
pawnbroker’s window, that Madeline’s one little brooch had gone the
same way; also—oh, breathe it not!—her best gown and hat; also
Mr. Wynne’s top coat and evening dress clothes; that the invalid
alone tasted meat—and in scanty portions—Madeline telling many
clever fibs with regard to her own dinner. Her inexhaustible spirits
and vivacity seemed to sustain her—that, and a little bread and tea.
The one person who was well-to-do was the baby. He was clothed
in a beautiful cloak and hood—Mr. Jessop’s gifts—purchased, with
many blushes, by that keen-eyed, close-shaven gentleman, and
presented with pride to his godson and namesake. More than once
Madeline’s mental eye had seen these sumptuous garments
smuggled away to the pawnbroker’s round the corner, but she fought
hard with the idea, and had sternly kept it at bay—as yet. Their
circumstances were, indeed, all but desperate, when one evening
Mr. Jessop came thundering up the stairs, newspaper in hand, and
panted out, as he threw himself into the nearest chair and took off
his hat—
“I say, Mrs. Wynne, what was your name before you were
married?”
“My name,” she echoed, looking blankly at him, for she was trying
to keep the baby quiet and to do some copying simultaneously—vain
and exasperating task—“was West—Madeline West.”
“Ah! I thought so!” he cried triumphantly, clearing his throat and
unfolding his paper with a flourish.
“Then just listen to this:—‘Madeline West.—If this should meet
the eye of Madeline Sidney West, she is earnestly implored to
communicate with Mrs. H. of H. House, at once, when she will hear
of something greatly to her advantage.’ Now what do you think of
that?” he demanded of his friend, who, drawn up near a handful of
cinders, had been poring over a law book. “Looks like a legacy,
doesn’t it?”
“Too good to be true, I’m afraid. Eh, Madeline?”
Madeline turned her face alternately on the two men. A faint colour
had invaded her thin, white cheeks, and her eyes brightened as she
said—
“There is no harm in answering the notice; it may mean
something.”
“Why, of course it does,” cried Mr. Jessop, emphatically. “Get a
pen, give me the infant, and write a line now, and I’ll post it.”
And Madeline accordingly sat down and wrote to Mrs. Harper on
the spot, whilst her companions watched her in silence.
“Dear Mrs. Harper,
“I have seen your notice in the Times of to-day. My address
is—2, Solferino Place, Westminster.
“Yours truly,
“M. W.”
She was so accustomed to sign merely her initials, and was so
flurried between anticipation, anxiety, excitement, and the screams
of the baby, that she never had the presence of mind to write her full
name, and on this slight omission, this one little cog, turned a most
important factor in her future career.
CHAPTER VII.
A TELEGRAM FOR MISS WEST.
The very morning after Madeline had despatched her letter, a

telegram was handed in for Miss West, 2, Solferino Place. The
landlady herself mounted, breathless, to the attics, with the tan-
coloured envelope in her hand.
“I was just for sending it away, Mrs. Wynne,” she gasped,
surveying her with an inquiring eye; “but it came into my mind as I’d
show it to you on the chance.”
“Thank you; it is for me,” rejoined her lodger, hastily tearing it open
and running her eyes over it. As she read, she became crimson with
amazement and agitation. “Come at once—to-day if possible. News
of your father.—From Mrs. Harper, Streambridge,” was the message.
“But it’s for Miss West, and you’ve gone and opened it!” exclaimed
the landlady, suspiciously. “How is that, eh? I never would have
supposed—no, never,” folding her arms belligerently, “as you wasn’t
on the square; and as I’ve allus kep’ a respectable ’ouse, I couldn’t
think——”
“You need not think, Mrs. Kane; you need not alarm yourself about
the matter, it is all quite right. I am Mrs. Wynne, but I was Miss West
once upon a time. The sender of the message does not know that I
am married,” interrupted Madeline, speaking with studied composure
—though her heart was beating fearfully fast.
Insolent as Mrs. Kane was, she dared not quarrel with her. Her
roof covered them on sufferance. Were she to thrust them forth,
where were they to go? They were entirely at her mercy, for they
owed her money; and latterly she had been inclined to take out a
large amount of interest in rude insolence, biting gibes, and
unpleasant hints with regard to “paupers a coming and settling down
on poor, honest, hard-working people—paupers as could afford
dress, and theatres, and pianos once, and saved nothing for a rainy
day!”
Paupers—impecunious people like the Wynnes, especially Mrs.
Wynne, who bore the brunt of these encounters—could not afford to
stand on their dignity, and be independent and “move on.” They must
submit humbly; but it was insufferably galling—as galling to Madeline
as Miss Selina’s yoke, that had pressed upon her so sorely but one
little year ago.
Who but herself knew with what deprecating eyes and voice she
had pleaded with her impatient landlady for a little time, how humbly
she ventured to ask for coals, how stealthily she crept up and down
stairs, carrying baby, and doing her own miserable errands, making
her presence as unobtrusive as possible, for fear of offending her
hostess’s threatening eyes.
The hostess’s threatening eyes were fixed upon her now, with a
look that was an insult, as she listened to her hurried explanation
with a down-drawn lip.
“Oh, well, I suppose, as I know no better, I must believe you,” and
with a noisy sniff that intimated quite the reverse, Mrs. Kane glared
once round their squalid sitting-room, to see if anything were broken
or missing, or the valuable property damaged in any way; and, failing
to discover the smallest pretext for complaint, passed out of the
apartment with a heavy and aggressive strut, and banged the door
behind her.
Madeline lost not a second in rushing to the invalid with the great
news, and placing the slip of pink paper in his hand.
“There is something at last! I feel that a change is coming; these
terrible days cannot—cannot go on for ever. I believe my father is
alive, and coming home! What do you think, Laurence?” she asked,
and her voice trembled.
Laurence, still holding the telegram in his thin, transparent hand,
gazed at his wife for some seconds in silence. How changed she
was, he thought, with a pang of self-reproach. She was shabby—
very genteelly shabby. Her black dress was all mended and pieced,
her face was haggard, her eyes sunken, their look eager, anxious,
almost desperate.
An intelligent spectator would have declared that she was
obviously half-starved, and so she was. But how furiously she would
have disclaimed such a pronouncement. She would rather have died
than have admitted that truth. As long as Laurence had meat once a
day, as long as baby had milk, she did very well on anything, and
anything may mean almost nothing—it is an elastic word.
Meanwhile, Laurence had been telling himself that he had been a
culpable wretch to marry Madeline West. What would he say to her
father when he placed his daughter in his arms—a daughter in all but
rags, with a face pinched with famine, without a friend, without a
penny, and weighted with a dying husband and a peculiarly ill-
tempered baby?
How much better would it have been if he had curbed his foolish
fancy—nipped it in the bud, and left Madeline to her fate. Why had
he not wired to Mrs. Wolferton? What would her father say? Would
he cast her off?
Madeline had hinted that, as well as she could judge her father
from his letters, he was fond of show and style and great people. He
wished her to dance and sing and play well, and to speak French;
but he had never said a word about literature, or the English
classics, or what Laurence called “the higher education of women.”
On the other hand, he hoped that she would always make
acquaintance with girls her equals, or even superiors, and never
lower herself by school-friendships that it would be impossible for
him to recognize. Madeline had once innocently repeated this to her
husband verbatim, and it came vividly before him now. Madeline had
done more than form a friendship of which her aspiring parent would
disapprove, a friendship that could be slipped out of like an old
glove. Here she was tied for life to a poor man, whose only career
seemed likely to be that of an invalid—a stone round her neck as
long as he lived.
He had but faint hopes of his own recovery; everything was
against it. He knew that this could not be helped, and he was very
patient. If he had good wine, wholesome delicacies to tempt his
appetite, instead of gruesome scraps of stale, ill-cooked meat and
poisonous port at a shilling; if he could have a change to pure,
invigorating air, he might yet have a chance. And he knew that he
might as well long for the moon—for the entire firmament!
“What is to be done, Laurence?” asked Madeline, rather surprised
at his long silence. “What do you think of it?”
“You must go, of course,” he returned at last. “Go to-day.”
“To-day! My dear Laurence, what are you thinking of?” sitting down
on a rush chair as she spoke, and staring at him in amazement.
“Where is the money to come from? Look here,” producing a shabby
little purse, with a brass clasp, and turning out the pitiably small
contents, “all I possess is two and sevenpence.”
“Still you must go, Maddie, by hook or crook; much may depend
on it. A return third-class——”
“A return third-class would be twenty-two shillings—one pound
two,” she interrupted. “And, besides, I could not go in this,” looking
down at her gown; “now,” appealingly, “could I?”
“No, you could not,” he replied, with a little flush on his pale face.
“And you must get something out. To get something out something
else must go in. And,” speaking with an effort, “I never thought to
part with them, but they could not go in a better cause. I mean,”
wiping his damp forehead, “my mother’s miniature and my father’s
medals. The miniature is framed in seed pearls; the back is gold—it
ought to fetch a couple of pounds. It’s in my desk, Maddie, in a little
morocco case.” There were other things in his desk—neatly-copied-
out manuscripts. These, alas! were valueless—he had proved them.
“Take it, my dear, and welcome; and the medals—they will fetch a
few shillings.”
“Oh, Laurence,” suddenly kneeling down beside him, “I don’t like
to! Must I really? I know you think so much of them. They are the
only relics you possess. No, no; I really can’t!”
“Yes, you can, and you shall,” said the sick man, with sudden
decision. “Here, at last, is an opening for you, my poor Maddie.
Something tells me that your father is alive—is coming home rich.
You are his only child, his heiress. You will be looked after and
cherished when I am gone. Yes, my dear, it will be best for you in the
end. It was most wicked of me to marry you. I see it all now, only too
plainly. I had put by nothing for such a strait, and I had no wealthy
friends. But I never dreamt that it would come to this, Maddie;
believe me, I never did. Forgive me!” he urged, and tears, born of
weakness and remorse, stood in his hollow eyes.
“Laurence!” she interrupted, attempting to place her hand on his
mouth.
“I should have walked home in the snow that night; I should have
taken you to the Wolfertons’ house, and telegraphed for her; I should
have gone to the parish clergyman—done anything but what I did,
and which led to my dragging you into such a pit as this!” with an
inclusive wave of his hand and a glance round the mean little attic.
“But it won’t be for long now,” he added in a lower voice.
“Oh, Laurence,” she almost screamed as she seized his arm, “why
are you telling me such terrible things, when we have a little gleam of
hope at last? It is cruel—cruel of you. You couldn’t mean that, after
all we have gone through together—that when we are approaching
smooth water—you—you would leave me!”
And here she suddenly broke down and burst into tears, for, alas!
she had an agonizing inward conviction that there was truth in what
he said. How pale and thin and wasted he looked! No one would
recognize him who had seen him last year, with his shorn head,
gaunt cheekbones, and sunken eyes; and she had a heart-breaking
feeling that it was not mere actual illness, nor the dregs of that
terrible fever, that were to blame for this, but that cruel, pitiless,
ferocious wolf called want. He was dying of the lack of mere
necessaries, and she, miserable woman, was powerless to procure
them; and for this she laid down her head and wept as if her heart
would burst—her passionate sobbing fairly frightened Laurence.
Madeline’s tears were rarely seen; Madeline was always bright,
cheery, almost gay, at the very worst of times; and now came a
reaction, and she was weeping as he had never seen any one weep
before.
“Don’t, Maddie, don’t,” he whispered, feebly stroking her hair; “you
will be better without me, though you don’t think so now. You are
young—only nineteen—many bright days may be in store for you. I
will leave you contentedly, if your father has come home. The
greatest horror I have ever known will be lifted from my mind. You
don’t know, dearest, what torments have racked me as I lay awake
through the long, dark nights, listening to the clocks striking hour
after hour, and wondering what would become of you? Now
Providence has answered the question; your father will give you and
the child a home. There, Maddie, there, don’t; I can’t bear to see you
cry like this; and I—I may get over it, and—— And now, you see, you
have awakened the baby!” as a shrill, querulous cry from the next
room interrupted what he was about to say.
The maternal instinct thus roused, he hoped that her tears would
cease, as he was powerless to arrest them. And Madeline
completely broken down—Madeline, who was always so brave, who
had come out in a new light under the scorching flames of the
furnace of affliction—was a sight that completely unmanned him.
Madeline hastily dried her eyes, strangled her sobs, took her
shrieking offspring out of his cradle, and gave him his midday bottle
—an operation which appeased his appetite and soothed his
feelings. Then she came back to her husband with the child in her
arms, and said in a husky voice, “If you had change of air, good food,
properly cooked, fruit, wine, and the little delicacies all sick people
require, you would get well—I know you would. Promise me, promise
that you will try to get better! Promise me that you will wish to get
better, Laurence,” she continued tremulously, “for—for our sake.”
“I can promise that, at any rate, Maddie,” he answered with a dim
smile; “but you know the old proverb about wishes.”
“And you know that while there’s life there’s hope,” she answered
quickly. “I have hope; you must have hope too! And now I am going
out, you will have to mind baby,” placing the white bundle beside his
father, who eyed his charge dubiously, as it stared at him stolidly,
thumb in mouth.
Madeline hurriedly put on her hat and jacket, and, taking a key,
unlocked a brass-bound desk, and, after a little search, drew out the
morocco case. “Is this it?” she asked, holding it up. “This is what you
mean?”
A nod assured her that it was.
“You would like to look at it once more,” she said, gently laying it in
his hand. “I don’t know how to take it. You are so like her, too,”
looking down at the little oval miniature of a pretty, spirited girl with
dark eyes and dark hair, and seeing her husband’s gaze fixed
greedily on the portrait. “You were so fond of her, Laurence.”
“Not more than I am of you, Maddie,” he answered, closing the
case with a decisive snap. “And my father’s medals,” he said, as he
held them up, and looked at them wistfully. “Well, they will fetch a
few shillings, and they go in a good cause. Here, take them, my
dear, and go, and don’t be long.”
Needless to add this formula. Was she ever long? But time passed
very slowly when Madeline was absent from those two poor attics
which were called home.
CHAPTER VIII.
NOT MARRIED AFTER ALL.
“He has not awoke since, has he?” asked the anxious mother, as,
fully an hour later, she reappeared with a bundle and a basket.
“No”—with a sigh of relief—“I see he is sound,” laying down her load
as she spoke. “And now to begin at the very beginning, and to tell
you everything, Laurence,” opening the basket and producing a
bottle. “Here is some good port wine; I’ve carried it most carefully, so
as not to shake it. You must have a glass at once—that is to be the
beginning.”
“Oh, Maddie, what extravagance! When you——”
“Hush! please to listen,” exhibiting as she spoke a hunch of
grapes, six fresh eggs, a jar of Bovril, and a packet of biscuits from
her seemingly inexhaustible store, and laying them on the table.
“Then you are not going!” exclaimed her husband, in a tone of
deep disapproval.
“Oh yes, I am,” she answered promptly, now opening the bundle,
and shaking out a dress that she had pawned, and regarding it with
an expression that showed it was an old and favourite friend. “Here
is an A B C guide. I go to-night when I have left you comfortable, and
baby asleep. Mrs. Kane’s niece has promised to look after you to-
morrow, and to-morrow night I return, all being well.”
“Then they gave you a good price for the miniature and the
medals.”
“Price!” she echoed indignantly. “They turned the miniature over
and over, and sneered at it, and said they had no sale for such like;
but they could not say that it wasn’t real gold and pearls, and they
gave me eighteen shillings, and said it was more than it was worth,
and ten shillings on the medals. Medals are a drug in the market.”
“Then how—where did you get money for your journey?” asked
her husband, in a tone of amazement bordering on impatience.
“See here!” holding up both her bare hands. Very pretty hands
they were, but now a little coarse from hard work. “Do you miss
anything, Laurence?” colouring guiltily.
“Yes, your—wedding-ring—and keeper,” after a moment’s pause—
a pause of incredulity.
“You won’t be angry with me, dear, will you?” she said coaxingly,
coming and kneeling beside him. “It makes no real difference, does
it? Please—please don’t be vexed; but I got a sovereign on them,
and they are the first things I shall redeem. You must have
nourishing food, even if I had to steal it; and I would steal for you!”
she added, passionately. “I shall only take a single ticket—third
class. Mrs. Harper will surely lend me a few pounds, and I will be
able to leave ten shillings for you to go on with.”
“How can I be angry with you, Maddie?” he replied. “It is all my
fault—the fault of my rashness, thoughtlessness, selfishness—that
you have had to do this, my poor child! Oh, that snowy night was a
bad one for you! I ought to have left you, and walked back.”
“Such nonsense!” cried his wife, whose spirits were rising. “I won’t
hear you say such things! It’s a long lane that has no turning. I think
—oh, I believe and pray—that I do see the end of ours! And now
there is a nice roast chicken for your dinner. I left it with Mrs. Kane
downstairs. She asked me if I had come in for a fortune? A fortune,
indeed! It was only three and three-pence, but I told her that I
believed that I had. Oh dear, oh dear, I hope my words will come
true!”
Madeline’s packing was represented by changing her dress; her

preparations were confined to brushing, rubbing, and inking her hat,
mending her gloves, which, like the typical landlady, “had seen better

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Turkish multinationals : market entry

and post-acquisition strategy Ayden

Yuksel Ayden, Mehmet Demirbag, and Ekrem Tatoglu

More information about this series at

Palgrave Studies of Internationalization in Emerging Markets

Library of Congress Control Number: 2017948168

© The Editor(s) (if applicable) and The Author(s) 2018

Cover illustration: Olga Kozyrina / Alamy Stock Vector

Printed on acid-free paper

This Palgrave Macmillan imprint is published by Springer Nature

In line with the growing interest in companies from emerging markets,

executives in their organizations and industries provided valuable insights

Aalborg, Denmark Yuksel Ayden

2 Internationalization of the Turkish Business

3 Theoretical Perspectives on Emerging Country

4 Characteristics and Patterns of Turkish MNEs’

5 Market Entry Strategies of Turkish MNEs 127

6 Post-Acquisition Strategies of Turkish MNEs 169

7 Synthesis and New Directions for Research 187

Appendix A: Case Firms 213

Appendix B: Research Methodology 231

BKT Banka Kombetare Tregtare

Fig. 2.1 Turkey’s population and population growth rate

Table 2.1 Turkey’s leading exporting and importing partners in 2016 22

© The Author(s) 2018 1

i­nternationalization of Turkish MNEs are few. Studies that attempt to

other words, applying these three views to Turkish MNEs’ international-

studies. We provide an analysis of the drivers, motives, entry modes, and

Dunning, J. H. (1980). Toward an eclectic theory of international production:

newly industrialized economies. Journal of International Business Studies,

Welch, D. E., & Welch, L. S. (1996). The internationalization process and

© The Author(s) 2018 11

2 Geography, Demography, and Economy

statements from politicians encouraging people to have more children.

Populaon Growth Rate Total Populaon

GDP Per Capita GDP

2015 8.5 26.5 65.0

2.1 Before the 1980s

The early stages of industrialization in Turkey occurred in the 1930s

2.2 After the 1980s

By reducing stamp duty from 25% to 1% to liberalize imports,

Total Export Total Import Rate of Exports Meeng Imports

led growth ­policies started to fail because of policies designed to meet

leader and political uncertainty caused by protest votes by the public

led countries to invest in Turkey due to the availability of cheap labor

IFDI Stock IFDI Flow

Development Party government in late 2002), Turkey experienced a

After 2003, competition in the Turkish market reached a new stage:

Table 2.1 Turkey’s leading exporting and importing partners in 2016

TSI statistics, ­highlighting that Germany is the leading exporting part-

Table 2.2 Turkey’s leading exporting and importing products in 2016

UNCTAD records them as $145.5 billion. Likewise, Turkish OFDI stocks

Table 2.3 Composition of OFDI stock in 2015

countries. This market-seeking motive can be seen in Table 2.3 as well

Table 2.4 Composition of IFDI stock in 2015

While Turkey’s OFDI stock is rising, it is important to analyze its com-

Turkish Statistical Institute. (2017a). Foreign trade statistics. Retrieved January

The next morning, leaving Madeline at the station to follow by a

Aalborg, Denmark Yuksel Ayden

2 Internationalization of the Turkish Business

3 Theoretical Perspectives on Emerging Country

4 Characteristics and Patterns of Turkish MNEs’

5 Market Entry Strategies of Turkish MNEs 127

6 Post-Acquisition Strategies of Turkish MNEs 169

7 Synthesis and New Directions for Research 187

Appendix A: Case Firms 213

Appendix B: Research Methodology 231

Table 2.1 Turkey’s leading exporting and importing partners in 2016 22

internationalization of Turkish MNEs are few. Studies that attempt to

2 Geography, Demography, and Economy

Populaon Growth Rate Total Populaon

2.1 Before the 1980s

2.2 After the 1980s

Total Export Total Import Rate of Exports Meeng Imports

led growth policies started to fail because of policies designed to meet

TSI statistics, highlighting that Germany is the leading exporting part-