The influence of firm-specific advantages and entry mode choice on performance: the case of Japanese foreign direct investment in Australia

Abstract

The main objective of this study is examining how firm-specific factors and entry mode choice (including the non-conventional forms) of Japanese multinational enterprises determine the financial performance of their Australian subsidiaries. We expect that the firm will make choices regarding the Foreign Direct Investment (FDI) strategy in such a way as to make the best possible use of its resources in achieving its FDI goals. Firms must decide what entry mode best utilises their resources and is most likely to lead to successful financial performance. The financial performance of Japanese subsidiaries located in Australia is compared on the basis of the ownership-based entry mode of 209 subsidiaries between 1992 and 2002.