Instructor: Lennart Bogg
Cansin Arsen KADAKAL
Table of Content
i. Abstract 2 ii. Introduction 3 iii. Economic Outlook of Turkey 4 iv. Why to invest in Turkish Steel Sector 7 v. Structure of ferrous metal sector in Turkey 8 vi. International Steel Market for Turkey 12 vii. SWOT analysis 17 viii. Conclusion 17 ix. References 19
FDI DECISIONS for MNEs in TURKEY: Analysis for Turkish Steel Sector
FDIs enhance globalization and cultural interaction between countries which creates competitive advantages, sustainable development and high profits for MNE’s on the other hand it provides job opportunities, welfare increasing in the society and sometimes know-how (technology in production process) for markets. Until beginning of the 1980 Turkey had been closed economy, then since that time it has been open economy in all sectors. Turkey had transformation stage in all sectors and it has increased trade volume in time. Due to that Turkey expanded in most of the sectors, it needed to more raw materials and intermediate good for supplying request of the trade allies. Especially in the steel sector expanded highly because it is common raw material for the most sectors, such as construction, automotive, home applications industries hence Turkey has become one of the largest steel exporter in the world. This paper aims to arouse interest in steel sector investment in Turkey and enlighten persons who want to understand deeply and get more information about the eligibility of potential investments in steel sector in Turkey by using SWOT analysis methodology.
Today’s global world and some parts of the countries’ politics are being shaped by large scaled multinational companies’ abroad investment. So far the MNEs (Multinational Enterprises), accessing to other nation’s sources and labor force for the big companies to get higher profits become much easier than before. These companies prefer to invest in emerging markets because of beneficial factors that can’t be ignored, especially when it is conceived present world market is very competitive. Many different kinds of FDIs (Foreign Direct Investments) have huge beneficial effects if it is done right place but FDI decisions has always been hard for MNEs. It takes long decision-making process which multinational companies must consider political risks, economic stability, incentives, unit production cost of candidate country. Also Eiteman (2010) claims that FDIs enhance globalization and cultural interaction between countries which creates competitive advantages, sustainable development and high profits for MNE’s on the other hand it provides job opportunities, welfare increasing in the society and sometimes know-how (technology in production process) for markets. In addition to that political decision given by governments and low costs of production attracts foreign investors to emerging markets for using advantages of privileges provided by governments and potential high returns of investments. There are bilateral benefits for both sides. Hence some governments especially developing countries keen to give more incentives to undertake FDI within country....