Spoilt for Choice: Explaining the location choice of Turkish Transnationals

The investments of Turkish entrepreneurs to other countries increased in the 1990s. This paper explores Turkish FDI abroad focusing on the factors influencing the FDI decision and location choice, using micro data collected from investor firms. A micro level data set for the Turkish FDI abroad is constructed using the information gathered through questionnaires conducted at some selected firms, which have engaged in FDI abroad. The data is explored using statistical and econometric techniques by grouping the countries based on their geographical location. Among the factors that determine the location choice of investors access to consumers and suppliers, market penetration; the presence of Turkish firms and Turkish population, and similarity to Turkey; trade opportunities and preferential trade agreements; together with labour costs and availability of skilled workers affect the location choice of Turkish transnationals. Key words: outward foreign direct investment, location choice, Turkey