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Reputation Barriers, Marketing Capacities, and Japaneses Investors' Choice of Entry Strategy Into the US


  • Shih-fen, C.
  • Ming, Z.


Both researchers and practitioners claim that foreign investors acquire U.S. firms to gain access to reputable brands. There is, however, no empirical evidence to support this argument. This study uses 269 Japanese investments made in the US to test the hypothesis that Japanese investors' decision to acquire U.S. firms depends on both industry-specific reputation barriers and firm-specific marketing capabilities. We have found that Japanese investors are more likely to use acquisitions to enter a U.S. industry in which local competitors have erected higher reputation barriers. Inversely, Japanese investors endowed with more marketing resources are less likely to expand in the US through acquisitions. This study is the first that applies a vector of marketing variables to explain why Japanese manufacturers choose acquisitions over greenfield investments to enter the US.

Suggested Citation

  • Shih-fen, C. & Ming, Z., 1996. "Reputation Barriers, Marketing Capacities, and Japaneses Investors' Choice of Entry Strategy Into the US," The A. Gary Anderson Graduate School of Management 96-27, The A. Gary Anderson Graduate School of Management. University of California Riverside.
  • Handle: RePEc:fth:caland:96-27

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    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F10 - International Economics - - Trade - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty


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