Profitability of Japanese Companies in Brazil: The Role of Firms' Local and International Experiential Knowledge and Subsequent Investment Decision

Informações

Código: ESO443
Divisão: ESO - Estratégia em Organizações
Tema de Interesse: ESO-B - Gestão Internacional

Autores

Mario Henrique Ogasavara

Resumo

This study attempts to empirically investigate how the firms’ local and internationalexperiential knowledge affect performance of its overseas subsidiaries. The accumulation ofthis knowledge is important because multinational companies usually face a certain level ofuncertainty when investing in a culturally different market. Additionally, this paper proposesthat a firm can acquire local experiential knowledge not only by operating for a long time inthe local market as shown by previous studies but also by increasing the number ofinvestments in the host country. In other words, the subsequent investment decision in thesame local market helps firms to achieve a higher profitability of overseas subsidiaries. Theempirical tests are performed using a random-effect model of generalized least squaresregression which is applied to cross-sectional time series data. The performance informationis based on profitability subsidiary-level data of Japanese companies located in Brazil.

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