Cultural differences, MNE learning abilities, and the effect of experience on subsidiary mortality in a dissimilar culture: Evidence from Korean MNEs

In a departure from prior studies presuming a beneficial experience effect in foreign direct investment (FDI), the present paper examines the conditions under which FDI experience may actually harm subsequent subsidiaries. We argue that multinational enterprises (MNEs) may draw erroneous inferences and learn incorrectly from their early expansions when new to a dissimilar culture, because their learning abilities are eroded by cultural...