IDEAS home Printed from https://ideas.repec.org/a/eee/iburev/v10y2001i6p645-659.html
   My bibliography  Save this article

The relative importance of old and new decision specific experience in foreign ownership strategies: an exploratory study

Author

Listed:
  • Rae Cho, Kang
  • Padmanabhan, Prasad

Abstract

In this paper, we examine the relative importance of old and recent decision specific experience for MNC's foreign ownership structure decision. Using established procedures to measure decision specific experience construct, we find, from data for Japanese MNCs for the period 1969-1991, empirical evidence that firms tend to rely on both old and recent decision specific experiences for their current ownership structure decision, but that they rely more on recent decision specific experience than on old decision specific experience, contrary to the conventional organizational learning view on the temporal importance of decision specific experience. Sub-sample analysis involving developed and developing countries indicates that both old and new decision specific experience are important for both groups of countries, but old (new) decision specific experience is marginally more important for investments made in developing (developed) countries.

Suggested Citation

  • Rae Cho, Kang & Padmanabhan, Prasad, 2001. "The relative importance of old and new decision specific experience in foreign ownership strategies: an exploratory study," International Business Review, Elsevier, vol. 10(6), pages 645-659, December.
    • Handle: RePEc:eee:iburev:v:10:y:2001:i:6:p:645-659
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969593101000361
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(3), pages 411-432, September.
    2. W H Davidson & Donald G McFetridge, 1985. "Key Characteristics in the Choice of International Technology Transfer Mode," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 16(2), pages 5-21, June.
    3. Hesna Genay, 1991. "Japan's corporate groups," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 15(Jan), pages 20-30.
    4. Yadong Luo & Mike W Peng, 1999. "Learning to Compete in a Transition Economy: Experience, Environment, and Performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(2), pages 269-295, June.
    5. Jean-François Hennart, 1991. "The Transaction Costs Theory of Joint Ventures: An Empirical Study of Japanese Subsidiaries in the United States," Management Science, INFORMS, vol. 37(4), pages 483-497, April.
    6. M Krishna Erramilli, 1991. "The Experience Factor in Foreign Market Entry Behavior of Service Firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(3), pages 479-501, September.
    7. Thomas P. Murtha & Stefanie Ann Lenway, 1994. "Country capabilities and the strategic state: How national political institutions affect multinational Corporations' Strategies," Strategic Management Journal, Wiley Blackwell, vol. 15(S2), pages 113-129, June.
    8. Zejan, Mario C, 1990. "New Ventures of Acquisitions. The Choice of Swedish Multinational Enterprises," Journal of Industrial Economics, Wiley Blackwell, vol. 38(3), pages 349-355, March.
    9. Jean-François Hennart & Young-Ryeol Park, 1993. "Greenfield vs. Acquisition: The Strategy of Japanese Investors in the United States," Management Science, INFORMS, vol. 39(9), pages 1054-1070, September.
    10. Wilkins, Mira, 1990. "Japanese Multinationals in the United States: Continuity and Change, 1879–1990," Business History Review, Cambridge University Press, vol. 64(4), pages 585-629, January.
    11. Prasad Padmanabhan & Kang Rae Cho, 1999. "Decision Specific Experience in Foreign Ownership and Establishment Strategies: Evidence from Japanese Firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(1), pages 25-41, March.
    12. Brent D Wilson, 1980. "The Propensity of Multinational Companies to Expand Through Acquisitions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(1), pages 59-64, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tsang, Eric W.K., 2005. "Influences on foreign ownership level and entry mode choice in Vietnam," International Business Review, Elsevier, vol. 14(4), pages 441-463, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Demirbag, Mehmet & Tatoglu, Ekrem & Glaister, Keith W., 2009. "Equity-based entry modes of emerging country multinationals: Lessons from Turkey," Journal of World Business, Elsevier, vol. 44(4), pages 445-462, October.
    2. Mehmet Demirbag & Ekrem Tatoglu & Keith W. Glaister, 2008. "Factors affecting perceptions of the choice between acquisition and greenfield entry: The case of Western FDI in an emerging market," Management International Review, Springer, vol. 48(1), pages 5-38, February.
    3. Slangen, Arjen & Hennart, Jean-François, 2007. "Greenfield or acquisition entry: A review of the empirical foreign establishment mode literature," Journal of International Management, Elsevier, vol. 13(4), pages 403-429, December.
    4. Sels, A.T.H., 2006. "Foreign direct investment as an entry mode. An application in emerging economies," Other publications TiSEM 583ca9b5-1691-425d-8f77-0, Tilburg University, School of Economics and Management.
    5. Demirbag, Mehmet & Glaister, Keith W. & Tatoglu, Ekrem, 2007. "Institutional and transaction cost influences on MNEs' ownership strategies of their affiliates: Evidence from an emerging market," Journal of World Business, Elsevier, vol. 42(4), pages 418-434, December.
    6. Larimo, Jorma, 2003. "Form of investment by Nordic firms in world markets," Journal of Business Research, Elsevier, vol. 56(10), pages 791-803, October.
    7. Li, Peng-Yu & Meyer, Klaus E., 2009. "Contextualizing experience effects in international business: A study of ownership strategies," Journal of World Business, Elsevier, vol. 44(4), pages 370-382, October.
    8. Anne-Wil Harzing & Markus Pudelko, 2016. "Do We Need to Distance Ourselves from the Distance Concept? Why Home and Host Country Context Might Matter More Than (Cultural) Distance," Management International Review, Springer, vol. 56(1), pages 1-34, February.
    9. Bell, J.H.J., 1996. "Joint or Single Venturing? : An Electric Approach to Foreign Entry Mode Choice," Other publications TiSEM 06f84735-3cf5-432f-8bc8-c, Tilburg University, School of Economics and Management.
    10. Anil, Ibrahim & Tatoglu, Ekrem & Ozkasap, Gaye, 2014. "Ownership and market entry mode choices of emerging country multinationals in a transition country: evidence from Turkish multinationals in Romania," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 19(4), pages 413-452.
    11. Castellani, Davide & Zanfei, Antonello, 2004. "Choosing international linkage strategies in the electronics industry: the role of multinational experience," Journal of Economic Behavior & Organization, Elsevier, vol. 53(4), pages 447-475, April.
    12. Mukherjee Subhasree & Dhayanithy Deepak, 2017. "Effect of Inter-organizational Network on TMT – Entry Mode Choice relationship," Working papers 246, Indian Institute of Management Kozhikode.
    13. Padmanabhan, Prasad & Cho, Kang Rae, 1995. "Methodological issues in International Business Studies: The case of foreign establishment mode decisions by multinational firms," International Business Review, Elsevier, vol. 4(1), pages 55-73, March.
    14. Francisco J. Más & Felipe Ruiz Moreno, 2003. "Spanish Company Foreign Market Entry," Working Papers. Serie EC 2003-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    15. Marina Papanastassiou & Robert Pearce & Antonello Zanfei, 2020. "Changing perspectives on the internationalization of R&D and innovation by multinational enterprises: A review of the literature," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 623-664, June.
    16. Douglas Dow & Jorma Larimo, 2011. "Disentangling the Roles of International Experience and Distance in Establishment Mode Choice," Management International Review, Springer, vol. 51(3), pages 321-355, June.
    17. Slangen, A.H.L., 2007. "Do Multinationals Really Prefer to Enter Culturally-Distant Countries Through Greenfields Rather than Through Acquisitions? The Role of Parent Experience and Subsidiary Autonomy," ERIM Report Series Research in Management ERS-2007-060-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    18. Morschett, Dirk & Schramm-Klein, Hanna & Swoboda, Bernhard, 2010. "Decades of research on market entry modes: What do we really know about external antecedents of entry mode choice?," Journal of International Management, Elsevier, vol. 16(1), pages 60-77, March.
    19. Hendrik Klier & Christian Schwens & Florian B. Zapkau & Desislava Dikova, 2017. "Which Resources Matter How and Where? A Meta-Analysis on Firms’ Foreign Establishment Mode Choice," Journal of Management Studies, Wiley Blackwell, vol. 54(3), pages 304-339, May.
    20. Hitt, Michael A. & Li, Dan & Xu, Kai, 2016. "International strategy: From local to global and beyond," Journal of World Business, Elsevier, vol. 51(1), pages 58-73.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:10:y:2001:i:6:p:645-659. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.