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Organizational Learning, Unlearning and Re-internationalization Timing: Differences Between Emerging- Versus Developed-Market MNEs

Not all firms are successful in internationalizing their operations; many withdraw, and some make a second attempt (after an appropriate ‘time-out’). We compare the re-internationalization of emerging market multinationals (EMNEs) with developed market multinationals (DMNEs) to investigate key differences. Although DMNEs may have greater experience in internationalization, with supposedly superior market-specific knowledge based on experience, this does not always have positive effects and may be a disadvantage for re-entry. We find that not all types of market-specific experience are beneficial for re-entry. Being able to unlearn past experience associated with the initial entry may be just as valuable a firm-specific advantage (FSA) for re-entrants. EMNEs are not necessarily at a disadvantage when re-internationalizing because, compared to their developed market counterparts, they have less to ‘unlearn’ as they often lack deeply embedded routines associated with international heritage. We also find EMNEs are less deterred by under-performance from the initial entry and are likely to re-internationalize more quickly than DMNEs. EMNEs, given their newness and absence of deeply embedded routines, are less likely to be victims of inertia.

Keywords: re-internationalization timing, EMNEs, organizational learning and unlearning, market-specific experience, foreign market exit, entry and re-entry modes

JEL Classification: F23

Published on 3rd July 2020
Authors Professor Rajneesh Narula
Series Reference JHD-2020-03