Abstract
As the visibility and growth of emerging economies have increased in the global economy, the operations of the firms in these economies have become more significant. Especially, the liberalization attempts have increased the internationalization level of firms from both advanced and emerging countries. However, the performance returns of internationalization for firms is a controversial issue. Relevant literature involves many studies that have found negative, positive and mixed impact of internationalization level on financial performance. This study investigates the relationship of internationalization and financial performance of firms in Turkey which have a long history of liberalization and internationalization as other emerging economies. 3386 observations that are gathered from 295 firms listed in BİST for the years of 2005-2018 are analyzed with panel fixed effects model. According to findings, the financial performance of sample firms decreases as their internationalization increases. Similarly, the increase in R&D intensity and leverage ratio impacts their financial performance negatively. On the contrary, as the size of firms increases, the level of their financial performance also increases. According to the findings of the study, firms in Turkey could not get expected positive returns of internationalization so far. Furthermore, it can be said that the international competitive advantage of firms of Turkey could not be increased only by export incentives. Future studies can investigate the role of family ownership and control which are very common in Turkish firms on the relationship between internationalization and performance. Research findings of studies about small and medium sized firms by using primary data sources can also expand the results of current study.
Subject
General Earth and Planetary Sciences,General Environmental Science
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