Entry mode strategy and performance: the role of FDI staffing

This study investigates the role of staffing approaches as a moderator of the relationship between entry mode strategy and performance of Japanese foreign direct investments (FDIs). Based on theories of a firm's resource profile, organizational structure, technology transfer, and ethnocentric and polycentric staffing, we hypothesize performance outcomes of Japanese overseas investments. For joint ventures, we find that ethnocentric staffing is negatively and significantly related to subsidiary performance. Conversely, for wholly owned ventures we find that ethnocentric staffing is positively and statistically significantly related to subsidiary performance. We discuss the implications for these findings from strategic and human resources perspectives. (C) 2002 Elsevier Science Inc. All rights reserved.