Foreign direct investment and entry modes from Turkey to Africa :|the investment, climate, determinants, opportunities, challenges

Abstract

Firms must choose one of the different entry strategies, such as exporting, foreign direct investment, joint venture while entering a foreign market. Various factors can affect entry mode decision. This study aims to determine which internal and external factors are influencing the foreign entry mode decision of Turkish companies entering the Kenyan market. Economic and political stability, economic growth rates, intensity of competition, company size and country experience among many other internal and external factors have been tested with the cases based on real business experiences of five Turkish companies operating in Kenya. For this purpose, experiences have been collected from 5 companies via online-administered questionnaires and interviews. Country managers who are responsible for Kenya of these five companies were chosen as participants according to their direct role or knowledge about the entry mode decision-making process taken within the company. According to the findings, economic and political stability as well as high growth rates in GDP more likely lead the Turkish companies to make direct investment in Kenya instead of choosing an export entry mode. Although there is one exception among the firms, firm size is also a highly influential factor in choosing an entry mode that requires high resource commitment. Level of competition and previous experience in the target market were not observed as highly influential factors for all firms, as hypothesized in the study. This work presents the outcome of research in Turkish companies’ entry mode decision to the Kenyan market and factors that affect their choices.