Quotation Putzhammer, Moritz, Fainshmidt, Stav, Puck, Jonas, Slangen, Arjen. 2018. To elevate or to duplicate? Experiential learning, host-country institutions, and MNE post-entry commitment increase. Journal of World Business. 53 (4), 568-580.


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Abstract

A multinational enterprise’s (MNE) decision to commit more resources to a host country operation is a key aspect of internationalization. MNEs can change their foreign operation mode in several ways in order to increase host-country commitment after initial entry, but existing theory on mode changes provides little guidance on what drives MNEs to increase commitment in a certain way over another. In this paper, we differentiate between mode duplication, whereby an MNE replicates an existing operation mode in a host country, and mode elevation, whereby an MNE establishes a new, different mode of operation either in lieu of or in addition to an existing one. We subsequently leverage learning theory to argue that both deeper international experience and broader international experience increase the likelihood of implementing a mode elevation rather than a mode duplication due to the higher complexity of the former. We further argue that these relationships are not uniform across different levels of host-country institutional quality. We test our hypotheses in a primary dataset of 80 Austrian MNEs implementing 527 mode changes while internationalizing into 21 countries in Central and Eastern Europe over 24 years, and find support for our theory. Overall, this study contributes to the international business literature on mode changes by offering theory and evidence regarding the drivers of whether an MNE increases foreign commitment by establishing a new operation mode or by duplicating an existing one in a host country.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of World Business
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, MAN-A, STRAT-B, WH-A
Language English
Title To elevate or to duplicate? Experiential learning, host-country institutions, and MNE post-entry commitment increase
Volume 53
Number 4
Year 2018
Page from 568
Page to 580
Reviewed? Y
DOI https://doi.org/10.1016/j.jwb.2018.03.004
Open Access N

Associations

People
Putzhammer, Moritz (Details)
Puck, Jonas (Details)
External
Fainshmidt, Stav (Florida International University, United States/USA)
Slangen, Arjen (KU Leuven, Belgium)
Organization
International Business (Details)
Institute for International Business IN (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5300 Economics (Details)
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