Implications of firm experiential knowledge and sequential FDI on performance of Japanese subsidiaries in Brazil |
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| Authors: | Mário Henrique Ogasavara Yasuo Hoshino |
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| Institution: | (1) Department of Japanese Studies, National University of Singapore, Block AS4, Level 3, 9 Arts Link, Singapore, 117570, Singapore;(2) Graduate School of Accounting, Aichi University, 2-10-31 Tsutsui, Higashi-ku, Nagoya 461-8641, Japan;(3) Professor Emeritus, University of Tsukuba, Tsukuba, Ibaraki, Japan |
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| 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.
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| Keywords: | Market-specific knowledge General knowledge Sequential investment Japanese FDI Subsidiary performance |
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