Implications of firm experiential knowledge and sequential FDI on performance of Japanese subsidiaries in Brazil

Implications of firm experiential knowledge and sequential FDI on performance of Japanese... A foreign firm investing in a culturally different market usually faces a certain level of uncertainty. This study proposes that as a multinational company accumulates experiential knowledge, it develops more capabilities and know-how and consequently reflects on subsidiary performance. Based on a subsidiary level sample of Japanese firms located in Brazil, the empirical findings of this study demonstrate that the accumulation of both international and local experiential knowledge can positively affect subsidiary performance. Moreover, a firm’s sequential foreign direct investment decision in the local market is a key strategy to achieving a higher level of subsidiary profitability in comparison with a first-time investment firm. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

Implications of firm experiential knowledge and sequential FDI on performance of Japanese subsidiaries in Brazil

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Publisher
Springer US
Copyright
Copyright © 2008 by Springer Science+Business Media, LLC
Subject
Finance; Corporate Finance; Accounting/Auditing; Econometrics; Operation Research/Decision Theory
ISSN
0924-865X
eISSN
1573-7179
D.O.I.
10.1007/s11156-008-0103-x
Publisher site
See Article on Publisher Site

Abstract

A foreign firm investing in a culturally different market usually faces a certain level of uncertainty. This study proposes that as a multinational company accumulates experiential knowledge, it develops more capabilities and know-how and consequently reflects on subsidiary performance. Based on a subsidiary level sample of Japanese firms located in Brazil, the empirical findings of this study demonstrate that the accumulation of both international and local experiential knowledge can positively affect subsidiary performance. Moreover, a firm’s sequential foreign direct investment decision in the local market is a key strategy to achieving a higher level of subsidiary profitability in comparison with a first-time investment firm.

Journal

Review of Quantitative Finance and AccountingSpringer Journals

Published: Nov 26, 2008

References

  • The perceived usefulness of network experiential knowledge in the internationalizing firm
    Blomstermo, A; Eriksson, K; Lindstrand, A; Sharma, DD

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