In many cases the inability to manage cultural differences has seriously impeded the success of off-shore ventures. Managing an environment of cultural diversity is, in fact, a prerequisite to taking full advantage of firm and host country strengths. Thailand has been selected as the research site because that country has been among the world's leading nations attracting foreign direct investment in the recent past. This paper reports on the determinants of firm performance among approximately 110 U.S. and Japan-based manufacturing firms in three sectors, chemicals, electronics and metals, operating in Thailand. Using two related measures, we find significant differences in profitability between U.S. and Japanese firms but little difference in rate of sales growth.
Firm age appears to have the greatest influence on all measures of firm performance considered.