Abstract

Differing from the extant literature of entry mode that commonly taking an economic rationale and assuming each entry mode decision as independent one, the present research attempts to explain the foreign entry mode decisions made by member business units within a business group from the angle of organizational learning. Based on a longitudinal database containing 1,471 foreign direct investments cases made by 130 Taiwanese business groups during the years of 1973 and 2003, we examine the influences of organizational learning among member companies within a business group on choosing their foreign entry modes. Three reference targets that may facilitate imitative learning are examined, both separately and collectively, namely, business group, business division, and the host country. Our empirical evidence shows that experiences of the same business division and of more recent time play a significant role affecting subsequent entry mode decision, which supports the existence of trait-based imitation and the recent effect of experiential learning. Implications and suggestions of these research results are also discussed.