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Asian Business & Management

, Volume 7, Issue 3, pp 353–380 | Cite as

The Effects of Entry Strategy and Inter-Firm Trust on the Survival of Japanese Manufacturing Subsidiaries in Brazil

  • Mário Henrique Ogasavara
  • Yasuo Hoshino
Article

Abstract

This paper examines the effects of entry strategy and inter-firm trust on the survival of overseas subsidiaries in an emerging market, recognizing different types of firm exit, levels of ownership equity and types of joint venture in the analysis. The findings demonstrate that international joint ventures are more likely to be exited than wholly owned subsidiaries, though the high exit rate is due to capital divestiture, not firm closure. Further, when controlling for different levels of equity ownership and considering other types of joint ventures, only subsidiaries with minority equity ownership show a higher likelihood of divestment than other entry modes. Concerning inter-firm trust, the results suggest that partners having prior partnership experience will experience less exiting than first-time alliance partners. A sample of 224 Japanese manufacturing subsidiaries established in Brazil over 1989–2003 provides empirical evidence for this study.

Keywords

Japanese subsidiaries joint ventures inter-firm trust firm survival 

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Copyright information

© Palgrave Macmillan Ltd 2008

Authors and Affiliations

  • Mário Henrique Ogasavara
    • 1
  • Yasuo Hoshino
    • 2
  1. 1.Department of Japanese StudiesFaculty of Arts & Social Sciences, National University of SingaporeSingapore
  2. 2.Graduate School of Accounting, Aichi University and University of TsukubaHigashi-kuJapan

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