Effects of corporate governance and ınstitutional distance on entry strategies of multinational companies from an emerging country: Evidence from Turkey

The aim of this study is to examine the entry strategy of multinational companies from emerging countries from the point of view of corporate governance and institutional distance. The study focuses on both the interaction effect between the corporate governance and the institutional distance, and the direct effects of these variables on the entry strategy decisions. Two data sets are obtained from the same companies and are analyzed in three different models. The data is obtained from a total of 71 multinational companies listed on Istanbul Stock Exchange and 374 their subsidiaries.In first model, it is reviewed the entry strategies of multinational companies from the point of view of agency theory. When the findings are completely evaluated, it is shown that there are impacts of both ownership structure and board of directors on entry strategies. In the second model, it is attempted to explain entry strategies from the point of view of institutional theory. It is found that the institutional distance between home and host countries have an effect on entry strategy decisions. In addition, it is also found that regulative, normative, cognitive and corruption distances between home and host countries have negative effects on the ownership of share in the subsidiary. On the other hand, it cannot be ruled out that there is no significant relationship between cultural distance and entry strategy decisions.In the third model, it is aimed to integrate the two conceptual frameworks. It is suggested that the impact of ownership structure and board of directors on entry strategy decisions are determined to some extent by the institutional distance. The findings of the moderator analysis illustrated that institutional distance is a moderator on the relationships between the corporate governance and entry strategy.Keywords: Entry Strategy, Institutional Distance, Corporate Governance