PERCEPTIONS OF FOREIGN INVESTORS ON THE TOURISM MARKET IN CENTRAL ASIA - Tourism in Central Asia: Cultural Potential and Challenges - page 309

cultural, historical and infrastructural proximity is the Silk Road proj-
ect (Cabrini, 2002); established over many hundreds of years between
Turkey and the CA countries. Now Turkey and the CA countries are in
the same project (WTO, 2005a, 2005b). Infrastructural proximity such
as highways, railways and airports also provides relatively comfortable
and easy accessibility between Turkey and the CA region. There appears
to be sufficient resources to expand opportunities for investment in
tourism infrastructure at all levels (www.Adb.org/CAREC, 2005). For
example, Uzbekistan with 33 airports with paved runways, Turkmeni-
stan with 23, Kazakhstan with 67, and Kyrgyzstan with 16 airports
(2004). All have fairly easy access from major airports and market areas
to the entire region (The World Factbook, Country listing, 2005).
A review of literature on investment confirms that foreign direct in-
vestment (FDI) is largely influenced by the earlier trade relations and by
the geographical and cultural proximity to host countries (Culpan and
Akcaoglu, 2003). The rate of cultural change between the host country
vis-a'-vis its home country orientation is probably one of most impor-
tant factors transnational corporations (TNCs) must fully comprehend.
Similarities in culture and language between the host country and the
home country of the TNC tend to facilitate the process of planning, de-
velopment, managing and controlling hotels, resorts and tourist facilities
located abroad (Go et al., 1990). Naturally, geographical proximity
along with cultural proximity has helped some Turkish companies to ex-
pand their investment into these countries (Culpan and Akcaoglu, 2003).
The nature of such collaboration and expansion of investment into
these countries by Turkish companies can be best explained by an eclec-
tic paradigm of international production theories, which is also known
as Ownership-Location-Integration (OLI) paradigm that combines
theories into a general eclectic framework (Fig. 1; Culpan and Akcao-
glu, 2003).
The eclectic paradigm suggests that FDI depends upon three advan-
tages. The TNC has some specific ownership advantage (O) as compared
to the domestic/local firm, thus making it more competitive. There has to
be a location advantage (L) of production in the foreign country rather
than producing at home for export. There also has to be some internal-
ization advantage (I) meaning risk sharing and scale economy benefits.
Ownership advantages or firm-specific assets can be patents, trade-
marks, human capital, managerial superiority or reputation for quality.