The role of experiential knowledge and subsequent investment decisions on the profitability of japanese companies in Brazil

This study attempts to empirically investigate how firms' experiential knowledge and the decision to invest sequentially in the host country are associated with the performance of their overseas subsidiaries. This research advances prior studies by adopting an objective performance measure based on the profitability ratio at the subsidiary level. Using a random-effect model of GLS regression applied to a panel data of Japanese firms established in Brazil, the results provide theoretical and practical implications showing that experiential knowledge is positively associated with subsidiary prof...