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ESTABLISHMENT, SURVIVAL, SALES GROWTH AND ENTRY STRATEGIES OF JAPANESE MNCs SUBSIDIARIES IN INDIA

Author

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  • MEHDI RASOULI GHAHROUDI

    (Graduate School of Systems and Information Engineering, University of Tsukuba, 1-1-1 Tennodai, Tsukuba-Shi, Ibaraki-Ken, 305-8573, Japan)

  • YASUO HOSHINO

    (Graduate School of Accounting, Aichi University, 2-10-31 Tsutsui, Nagoya-Shi, 461-8641, Japan;
    Graduate School of Systems and Information Engineering, University of Tsukuba, 1-1-1 Tennodai, Tsukuba-Shi, Ibaraki-Kzu, 305-8573, Japan)

Abstract

This empirical study explores first the relationship between operating years and entry strategies based on wholly-owned and joint venture companies. Second, we examine the effects of equity ownership, size, entry strategy and subsidiary age on the sales growth ratio and the subsidiary's survival. Our findings show that in recent periods, the multi-national companies (MNCs) prefer to acquire high levels of equity ownership, including full ownership subsidiaries, especially when the subsidiary is in the manufacturing industry. Our results imply that capital, the age of the venture, the number of employees and full equity ownership affect survival. Finally, we find that subsidiaries with a small number of employees are likely to have a superior sales growth ratio and are more likely to survive.

Suggested Citation

  • Mehdi Rasouli Ghahroudi & Yasuo Hoshino, 2007. "ESTABLISHMENT, SURVIVAL, SALES GROWTH AND ENTRY STRATEGIES OF JAPANESE MNCs SUBSIDIARIES IN INDIA," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 12(04), pages 433-447.
    • Handle: RePEc:wsi:jdexxx:v:12:y:2007:i:04:n:s1084946707000745
    DOI: 10.1142/S1084946707000745
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    References listed on IDEAS

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    1. Kulwindar Singh, 2005. "Foreign Direct Investment in India: A Critical Analysis of FDI from 1991-2005," Development and Comp Systems 0511013, University Library of Munich, Germany.
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    Cited by:

    1. Ryan W. Tang & Ying Zhu & Hongbo Cai & Jinrong Han, 2021. "De-internationalization: A Thematic Review and the Directions Forward," Management International Review, Springer, vol. 61(3), pages 267-312, June.
    2. Sriyalatha Kumarasinghe & Yasuo Hoshino, 2009. "Entry Mode Strategies and Performance of Japanese MNCs in Australia and New Zealand: the Role of Japanese Employees," Asian Journal of Finance & Accounting, Macrothink Institute, vol. 1(1), pages 87105-87105, December.
    3. Schmid, David & Morschett, Dirk, 2020. "Decades of research on foreign subsidiary divestment: What do we really know about its antecedents?," International Business Review, Elsevier, vol. 29(4).
    4. Mehdi Rasouli Ghahroudi & Yasuo Hoshino & Ehsan Fakhraei, 2019. "Ownership Structure, Capital Structure, and Firm Survival," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(11), pages 1-19, November.

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