PUBLICATIONS & REPORTS

Contents Introduction

This paper proposes to treat a firm’s foreign expansion as a process of organizational learning shaped by institutional structures in addition to economic variables at the firm, industry, and country levels. An analysis of the expansion of South Korean manufacturing firms into China between 1987 and 1995 shows that business group experience and emerging institutional norms in the organizational field increase the rate of foreign expansion. Organizational learning variables significantly contribute explanatory power to the model above and beyond economic variables. While the previous experiences of the firm and of other firms in the same group are mutually reinforcing, institutional effects in the home country tend to disappear after firms make their first entry into the foreign country. The implications for the institutional analysis of repeated organizational events are discussed.