Globalization, Firm Performance And Group Affiliation In Emerging Markets: Evidence From Turkey

Although the process of globalization greatly affects business in all aspects, unfortunately, the firm-level effects of globalization have not been fully explored in the literature. This study aims to explore how the overall level of globalization of a country as well as its degree of economic, political and social globalization affect the performance of affiliated and unaffiliated companies operating in this business environment using a combined panel analysis. In order to explore potential differences that may apply between the effect of globalization on firm performance on group affiliated firms and unaffiliated firms, it focuses on Turkish listed firms for the period 2002-2009. The research findings show that while globalization increases the stock returns of both affiliated and unaffiliated groups of firms, it worsens the operating income of both groups of firms. This finding also implies that although the effects of economic and political globalization do not seem to differentiate much between affiliated groups and unaffiliated firms, social globalization can be said to affect operating income and firm growth rates of affiliated and non-affiliated firms differently. . Last but not least, the findings show that the most influential dimension of globalization in terms of its effect on firm performance for Turkish firms appears to be economic globalization.