Discussion

52 In figure 19, the total conditional effect of uncertainty on performance through networking is given with the numbers. Starting from the direct effect of total uncertainty on performance, the numbers show the result of the effect is barely significant with the P value of 0.005 and the levels of confidence interval involves zero on the edge. The direct effect of networking alone on performance is significant, likewise in every previous model, with the P value of 0.0211 and levels of confidence interval don’t contain zero. The effect of the interaction of total uncertainty and networking has an insignificant effect with the high P value of 0.3470 and the level of confidence interval containing zero.

53 expanding to. On the other hand the networking increases the performance of Turkish firms but not interacting with uncertainty. As a result, the outcome can be explained with 𝐻_!. The reason that the Turkish firms don’t face any uncertainty in this research can be explained with several reasons.

The firms that are involved in this research contain SMEs along with big size companies. Most of these big size companies were founded in 20^th century or even beginning of the 20^th century. Being in the business sector for a long period of time brings those companies some big advantages. Knowledge and experience are their biggest advantage. According to Hilmersson & Jansson (2012), the knowledge gained from international experience is folded into three different types. These are business network knowledge, societal knowledge and internationalization knowledge. Business network knowledge is gained over the time by interacting with suppliers and buyers in the host market. Societal knowledge is gained with the experience from the macroeconomic environment in the specific host market and internationalization knowledge is the non-specific experience of the firms gained in general internationalization activities. These three components that forms the market knowledge, have partial effect on reducing the uncertainty. In other words, business networking isn’t always forming the market knowledge alone but with other knowledge components, which are societal and internationalization. Johanson and Vahlne (1977) believe the commitment of firms to foreign direct investments are parallel to the firms’ internationalization experience. Another support of internationalization knowledge and how it reduces the host market uncertainty is from Meyer & Estrin (1997). They believe the more firms know about internationalization operations the less complex knowledge is needed for them to generate in their following international operations. Likewise the internationalization knowledge, the societal knowledge is a component of the market knowledge that is discussed in the literature. For example, Chetty, Erikkson, & Lindbergh (2006) find that institutional knowledge is gained better with more international experiences. In this finding, the institutional knowledge is directly related with societal knowledge, which is the specific host market knowledge. Hilmersson & Jansson (2012), support this finding by claiming, “Thus,

54 we assume that the generation of experiential knowledge about the society entered contributes to reducing uncertainty; that is, the more societal experience the firm has, the more degree the uncertainty is reduced after entry.”

Considering the other components of the market knowledge besides the networking knowledge, it can be said that the firms might not find the host market totally uncertain if they have one of those market knowledge components. It is very likely that the big size companies, which participated in this research, have at least one of each knowledge components of the host market they are launching their business to. Being an old and well-experienced firm allows these big size firms to have this market knowledge. According to Yener, Dogruoglu, & Ergun (2014), this kind Turkish firms seek the benefit by being experienced in this way:

“It has, in the past, participated in all beginner stage internationalization activities except proactively seeking international customers. It had sought profitable networks, good contacts and like-minded suppliers. It invested into building a profitable supply chain and built knowledge from its past experiences on the challenges of international business activities” (Yener et al., 2014, p.10). This situation might be one of the reasons why the firms, which participated in this research, don’t find the foreign market they launch to as an uncertain environment. This is the perspective when the societal and internationalization knowledge are taken into account. However there can be an outcome instead of an explanation in the perspective of only business networking knowledge. These big size Turkish firms are mostly conglomerates and family businesses as it is mentioned in the sample companies’ section. Conglomerate firms don’t focus on one industry but they have businesses in many industries. Since they are operating their businesses for a long time now they already have international experience and launched their businesses in many foreign markets after being saturated in the Turkish market. It can be assumed that the outcome in the perspective of business knowledge is that the big family businesses are launching their businesses in the host markets where they already launched their businesses for another industry.

Since the firms know the host market form their previous experiences, this gives them international, societal and business networking knowledge. Thus these three

55 components reduce the uncertainty in the host market and firms prefer to enter the markets where they won’t face the uncertainty of the environment.

The discussion of the outcome can be explained from different angles. After discussing the outcome from the angle of companies’ size and experience, other angles were deeply questioned. This time the outcome is linked with the markets where the Turkish firms are expanding. This paper discussed about reducing uncertainty repeatedly. However the cases, especially in the literature, it is mentioned that the assumed home and host markets are usually traditional markets. Yet again it is mentioned that some of the updated models are able to explain the expansion of the firms of emerging markets to traditional markets.

Nonetheless the expansion of traditional market firms to emerging markets is a rare mentioned case for the literature as Yener, Dogruoglu, & Ergun (2014) would support this claim. “Literature on SMEs tends to focus on developed countries.

Research on SMEs at developing countries is fewer” (Yener et al., 2014, p.10). The exceptional outcomes might occur when the expansion of the firms isn’t in the direction of traditional to traditional or emerging to traditional. For example, Jansson (2007) discusses this case in his book about emerging markets and their network approaching. He mentions that the international experience is hard to transfer for the Western firms, if they are expanding to emerging markets. When emerging markets are compared to Western markets, they are turbulent and institutionally different from the traditional markets. This is why the firms, which are entering from Western markets to emerging markets, might face uncertainty even though they have international experience in other markets. In the case of Turkish firms, while observing market entries to traditional markets, there are also market entries to other emerging markets or less developed markets. In the sample companies’ section, some of the markets are mentioned where the companies are globally expanding. These markets include the Caspian area, where Uzbekistan, Turkmenistan and Kazakhstan are located long with North African markets such as Algeria and Tunisia; Middle East markets such as Saudi Arabia and Qatar; other Eastern European markets such as Russia, Bulgaria, Romania. As it is seen, the Turkish firms aren’t only active in the Western market but also active in

56 the other markets. These markets can be called institutionally similar to Turkish market. The areas aren’t distant to Turkish market, which is the home market for the Turkish firms and the physic distance between both markets are close. The outcome from the perspective of the host markets is that the companies, which attended this research, are mostly operating their businesses in the markets, which aren’t institutionally different from the Turkish market. This gives them to operate their businesses in the markets, which, aren’t perceived as an uncertain environment. The similarities can be the government regulations, the laws affecting the business, tax policies, monetary policies, exchange rate, inflation rate and monetary policies from the perspective of macroeconomic environment.

Customer preference, competition, availability of products, changes in competitors’

prices, changes in competitors’ strategies and many other elements can be the similarities in the competitive environment. In brief, it can be assumed that Turkish firms don’t find the similar markets turbulent or unstable so the liability of foreignness and liability of foreignness are out of question in these markets.

The last potential outcome for the result that, the Turkish firms in the research don’t face any uncertainty in the foreign markets that they are operating their business can be explained in the perspective of the stability of the home institution and government policies. According to Eren-Erdogmus, Cobanoglu, Yalcin, & Pervez (2010), the host market environment is one of the determinants for the firms to evaluate before deciding to expand internationally. In the case of Turkish firms the environment in the home market wasn’t used to be stable and that was preventing firs to enter other international markets. "The unfavorable economic conditions in the home country acted as push factors for the Turkish firms’ internationalization. The last two economic crises in 1994 and 2001 caused recession and considerable decrease in the purchasing power of the domestic market” (Eren-Erdogmus, Cobanoglu, Yalcin, & Pervez, 2010). However, especially in the last 15 years the stability of the home institution seemed to be go in the other direction so that the Turkish firms can expand globally more freely. Erdilek (2008) would also accept the home market stability as an indicator for the international growth by taking it one further and calls it OFDI (Out forward FDI)

57 driver. According to him, the government of Turkey’s inner and outer policies created a stable home institution. Government is supporting the international expansions of the firms with better regularities such as reducing the restrictions and controls. Furthermore, the governments’ policies were to create a competitive home market by supporting the foreign firms to have an investment in Turkish market, again with less regularities and controls. With this way, the border of Turkish market became liberalized for both the Turkish firms who want to go abroad and the foreign firms who want to come to the Turkish market. According to Erdilek (2008), one of the most important regulation change that lead to a more liberal Turkish market is the foreign exchange regime. Thus the imports were increased and Turkish firms started to face with different foreign competitors in the home market. The Turkish market reduced its isolation from the international market and this situation allowed Turkish firms to compete with international players without entering the foreign markets. In a way, it can be assumed that the Turkish firms experienced how to compete against the foreign competitors. Of course it is not identical that having the competition in a host market and the home market but the international environment of the Turkish market is closing the distance, in other words the physic distance, with other markets. In order to sum up, the regularities of Turkish government is both inward and outward oriented.

This allows a dynamic environment at the border of Turkish market. Turkish firms have been entering the foreign markets more often and having international experiences while at the home market facing international competitors and experiencing the competition against the foreign firms. It can be assumed that these experiences have an influence on the components of the market knowledge, which is suggested by Hilmersson & Jansson (2012). Experiencing international markets and facing foreign competitors both in home and host countries increases the internationalization knowledge of the firms. In addition, the international environment in the host market, as it is mentioned before, closing the physic distance. It can be assumed that these are the two factors that reduce the liability of foreignness and can be the reasons of why the Turkish firms in this research don’t face uncertainty in the host markets.

58 Along with the result that Turkish firms don’t face uncertainty, there is a secondary outcome that is supported by the literature. Although according to the findings networking isn’t reducing the uncertainty, it increases the performance of the firms. There are other advantages of having a business networking besides reducing uncertainty. According to Ward (2019), there are six advantages of having a business network: New opportunities, visibility, staying current, problem solving, sharing knowledge/experience and confidence/morale. New partnerships and joint ventures always give firms opportunity to exploit new chances. In fact the business networking can also be a direct customer, which the firms can expand their businesses. Attending the business network events always put the firms in the center of the business environment and helps to raise their profiles by putting the firms in other parties’ minds. Also being so active and interacting with other firms put the firms in a position that enables to keep up the changes and updates in the business environment. In addition, business networking allows firms to share their resources to overcome the problems that they can’t handle individually.

Resources in this case can be skill, experience, knowledge, know-how, patent, financial and etc. All of the factors that are mentioned above can be an indicator for the firms to increase their performances. Briefly it can be said that there are many aspects that the firms can seek to have a benefit out of business networking to increase their performances.