Effects of Ownership and Internalization Advantages on Performance

A Comparative Study of Japanese Manufacturing and Service Subsidiaries in the United States and Latin America

Abstract

This paper attempts to prove empirically that ownership and internalization advantages play a more important role than entry mode in explaining the attained performance of subsidiary companies. Two multivariate analysis techniques were applied to four samples selected by segregating manufacturing and service companies in the USA and in Latin America. While a direct effect of ownership and internalization advantages on performance was found, a relation between entry mode and performance is not evident.