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

Tai Young Kim, Andrew Delios, Dean Xu

Research output: Contribution to journalArticleResearchpeer-review

37 Citations (Scopus)

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.
Original languageEnglish
Article numberlbq014
Pages (from-to)579-597
Number of pages19
JournalJournal of Economic Geography
Volume10
Issue number4
DOIs
Publication statusPublished - 10 May 2010
Externally publishedYes

Keywords

  • Experiential learning
  • Foreign subsidiaries
  • Organizational geography
  • Vicarious learning

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