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Inertial vs. mindful repetition of previous entry mode choices: Do firms always learn from experience?

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  • Albertoni, Filippo
  • Elia, Stefano
  • Piscitello, Lucia

Abstract

Experience, meant as the repetition of the same action, is considered a predictor of the entry mode choice in foreign markets because it allows reducing uncertainty. However, repetition does not necessarily increase the expected performance, depending on the learning stemming from previous experiences. Focusing on offshoring decisions, namely the choice between captive and outsourcing entry mode, we distinguish between the inertial repetition of routines vs. the mindful repetition of previous entry modes (where the company distinguishes and internalizes the outcomes of the past offshoring initiatives). We claim that: (i) mindful repetition leads to higher growth perspectives for the focal offshoring initiative, and; (ii) learning is higher when repetition concerns captive entry modes. Our empirical analysis, run on 410 companies' offshoring decisions undertaken from 2006 to 2011, confirms our expectation.

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  • Albertoni, Filippo & Elia, Stefano & Piscitello, Lucia, 2019. "Inertial vs. mindful repetition of previous entry mode choices: Do firms always learn from experience?," Journal of Business Research, Elsevier, vol. 103(C), pages 530-546.
    • Handle: RePEc:eee:jbrese:v:103:y:2019:i:c:p:530-546
    DOI: 10.1016/j.jbusres.2018.02.034
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