The Effects of Organizational Learning on International Growth: Conceptualization and Propositional Development

It is widely accepted that a key driver of a firm’s international growth is its knowledge on how to compete in foreign markets. Many firms, however, have attained substantial growth in foreign markets even though they have had little prior direct experience in those markets. Based crucially on the knowledge-based view and the organizational learning theory, the present study conceptualizes international firms’ learning and develops propositions that may explain both the effects of direct learning of cultures and economies in other countries and the effects of indirect learning from the experience of other firms on the success of international market expansion. The current study proposed that experiential knowledge with respect to culture and economy positively moderates the effects of those drivers on the success of firms’ international market expansion. In addition, the importance of indirect learning is highlighted in explaining the international growth of firms. Finally, this manuscript is concluded with a discussion of important implications for theory and practice by emphasizing the roles of experiential knowledge and indirect learning from competitors and interfirm relationships and with the limitations of the present study and the directions of future research.