Resource accumulation and overseas expansion by Japanese multinationals

In this paper, we examine the motivation for and outcome from a firm's multinational expansion strategy by analyzing two issues: first, the relationship between a firm's intangible assets and its investment abroad, and second, the evolution of the value of multinationality to shareholders as a firm's level of international activity and foreign experience changes. Overall, our results show that while it is typical for the Japanese firms in our sample to accumulate intangible assets prior to investing in foreign markets, these firms need experience in foreign markets before a return on this investment will be realized.