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Organizational geography, experiential learning and subsidiary exit: Japanese foreign expansions in China, 1979-2001

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Abstract

We examine how experiential learning and vicarious learning, as tied to a subsidiary's organizational geography, influence the exit rates of Japanese subsidiaries located in China. We find that exit rates were lower for subsidiaries that were established geographically proximate to the prior expansions of industry peers from Japan. Exit rates were also lower for subsidiaries established by firms with experience in similar product markets in China. Exit rates were greater, however, when a parent firm had substantial experience outside the product market of the current expansion. Importantly, the influence of a subsidiary's geographic proximity to its peers on its exit rate is contingent on whether its parent firm had prior experience inside or outside the product market of the new expansion.

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[Kim, Tai-Young] Sungkyunkwan Univ, SKK Grad Sch Business, Seoul 110745, South Korea

[Delios, Andrew] Natl Univ Singapore, Dept Business Policy, Singapore 117592, Singapore

[Xu, Dean] China Europe Int Business Sch, Shanghai 201206, Peoples R China


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Source

Journal of Economic Geography

ISSN:1468-2702

Year:2010

Issue:4

Volume:10

Page:579-597

Powered by JCR@2010

ESI Discipline:SOCIAL SCIENCES, GENERAL;

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