CN EN
Advanced

Do Firms Learn More From Small or Big Successes and Failures? A Test of the Outcome-Based Feedback Learning Perspective

Indexed by

SSCI Scopus FT ABDC-A*

Abstract

It has been recognized that previous experiences can provide different types of feedback. However, it has not been systematically explored why firms are more likely to learn effectively from certain types of experience than others. From a feedback-based learning perspective, we argue that it is useful not only to focus on feedback valence (success or failure experiences) but also to examine feedback saliency (the magnitude of the experience’s influence). Based on a sample of acquisitions by U.S. firms, our results indicate that a firm’s success experience drives up the premium that it pays for a subsequent acquisition, whereas a failure experience reduces this subsequent premium. Moreover, we find that the magnitude of the effects of the four types of experiences—small failure, big failure, small success, and big success—does not follow a symmetrical pattern of inverse effects.

Keyword

Author Community

[Yan Gong ; Yu Zhang] China Europe International Business School, 699 Hongfeng Rd, Shanghai, 201206, China

[Jun Xia] University of Texas at Dallas


Related Article

Source

Journal of Management

ISSN:0149-2063

Year:2019

Issue:3

Volume:45

Page:1034-1056

ESI Discipline:ECONOMICS & BUSINESS;

Cited Count
W
Loading... 2
C
Loading...
Get Fulltext
Rights and Licenses
Related Keywords
Communities & Collections
Access Stats
Creative Commons Licence
The content of CEIBS Research Online is licensed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0).