Performance of Japanese Foreign Investments in NAFTA Europe and NIEs

First this book investigates the factors affecting the choice of entry mode among Japanese manufacturing companies in Europe. By examining a sample of 311 Japanese manufacturing subsidiaries established in Europe obtained from the Toyo Keizai database we present evidence that the host country experience and technological know-how of investing parent companies positively influence their choice of shared ownership structure for foreign subsidiaries. Our findings indicate that large firms prefer a wholly-owned structure for their subsidiaries Moreover entry mode R&D intensity and number of expatriates are found to have a positive significant relationship with the performance of Japanese subsidiaries Second our empirical results show that size and subsidiary age are positively significantly related to firm performance. On the other hand cultural distance is found to have a small negative influence on profitability in an analysis of investments in 890 Japanese manufacturing subsidiaries in three distinct business environments: NAFTA (North American Free Trade Agreements) Europe and the NIEs (Newly Industrializing Economies).