INTERNATIONALIZATION AND FINANCIAL PERFORMANCE: AN EMPRICAL ANALYSIS ON LISTED COMPANIES IN TURKEY

Abstract

Purpose- The purpose of the study is to examine the impact of internationalization on financial performance. Methodology- Based on early studies, four different models which includes linear, squared, cubed and fourth power forms of the degree of internationalization (DOI) have been composed. The full sample includes 35 listed companies and 243 firm years between 2012-2018. Panel data regression analysis has used to test the relationship between DOI and financial performance. Findings- Our results support an inverted horizontal S-shaped relation between internationalization and financial performance. Conclusion- In academic literature there are numerous studies about the effect of internationalization of firms and entering new markets on the businesses. The results of the studies examining the relationship between internationalization and financial performance are also very different. In earlier studies, a linear relationship is accepted between internationalization and financial performance, but newer studies are usually based on a curvilinear relationship.