This study aims to examine the effects of firm capabilities and entry mode on the determinants of the localization level achieved by overseas subsidiaries of multinational enterprises through foreign direct investment. To test the hypotheses of this study, Tobit regression analysis was conducted on the overseas production subsidiaries of Japanese electronics firms that had entered Asian, North American, and European regions as of 1994, using the proportion of raw materials and components procured locally as the dependent variable. The statistical analysis results showed that the experiential capabilities that subsidiaries had built locally had a positive effect on achieving localization, but the technological capabilities and internationalization capabilities accumulated in the parent company either hindered the subsidiaries' independent local adaptation or had no significant effect. Additionally, when mergers and acquisitions were selected as the entry mode at the time of investment, the localization level achieved by subsidiaries was found to be higher compared to greenfield investment or joint venture approaches.