Japanese FDI in the USA and Latin America

This study concentrates on the study of the relationship between entry mode selection and Japanese subsidiary¿s performance in Latin America and the United States. Previous studies have focused on the same relationship, trying to determine if it is significant. However, they have given divergent answers. Although this relationship is of great importance for managers who plan to establish a foreign subsidiary, no conclusive answer prevails; and no previous work has attempted to explain the reason for the divergence among previous studies. This study tries to provide a solution to those two main problems, and to other two secondary problems, i.e., the specific location decision of Japanese subsidiaries, and the methodological operationalization of the advantages proposed by Dunning. It provides empirical evidence that the keiretsu relations among the parent firms promote a confounding effect on the analysis of the relationship. However, relationship between entry mode and performance is not evident in two states of the United States and countries of Latin America and by segregating manufacturing and services companies in the USA and in Latin America.