A comprehensive, empirical study of a large number of foreign companies doing business in Japan show that the majority of these firms classify themselves as successful. Only six percent were failures. The companies that are successful display an ability to use their own resources to create new technologies and new products and then transfer them back to the parent company. Findings from the study suggest that there are a number of inadequacies in the existing theories of MNEs and FDIs. Practical conclusions are offered to foreign companies who plan to invest in Japan, as well as to foreign and Japanese policymakers who seek to boost FDI in Japan.