International experience and imitation of location choices: The role of experience interpretation and assessment and its board‐level microfoundations

Spadafora, Ettore, Giachetti, Claudio, Kumodzie‐Dussey, Makafui Kwame and Elango, B (2022) International experience and imitation of location choices: The role of experience interpretation and assessment and its board‐level microfoundations. Global Strategy Journal. ISSN 2042-5805

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Abstract

Research summary
Drawing on the information-based imitation and information-processing perspectives, we examine how experience interpretation and assessment—and in particular its board-level microfoundations—affects the relationship between a firm's international experience and its decision to imitate the market leader's location choices. Our results show that the negative relationship between international experience and imitation of location choices is positively moderated by board turnover, board age, and board equity ownership but not influenced by board gender diversity. These findings advance our understanding of the interplay between information-based motives for imitation and firms' information processing and organizational learning. Specifically, we contribute to research on the effect of international experience on firms' mimetic behavior by pointing out the relevance of experience interpretation and assessment from a microfoundations perspective.

Managerial summary
Our study provides indications for executives attempting to predict competitors' global strategy. When it comes to location choices, we find that companies with less international experience are more likely to follow the market leader, while those internationally experienced are more likely to follow their own path. Moreover, lower board turnover, relatively younger directors, and smaller equity ownership can favor the articulation and exploitation of the lessons offered by prior international experiences, thus further reducing the company's inclination to imitate the leader's location choices. Firms seeking an independent path toward internationalization can therefore use corporate governance—and in particular board-level factors—to enhance their ability to interpret and assess their international experience.

Item Type: Article
Schools and Departments: University of Sussex Business School > Strategy and Marketing
SWORD Depositor: Mx Elements Account
Depositing User: Mx Elements Account
Date Deposited: 20 Sep 2022 12:33
Last Modified: 21 Oct 2022 15:30
URI: http://sro.sussex.ac.uk/id/eprint/107984

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