Learning About Entry Mode, Institutional Distance, and Cross-Border M&As in China

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Drawing on the learning perspective, we examine the validity of the repetitive momentum perspective vis-à-vis the conventional internationalization process (IP) model in the setting of MNCs’ entry into China. We argue that the accumulation of experience and knowledge regarding a certain entry mode such as cross-border merger and acquisition (M&A) or international alliance may lead an MNC to keep investing in the same mode. We also argue that institutional distance, which increases the necessity and difficulty of experiential learning, strengthens this repetitive momentum. Analyses based on a sample of 1,561 MNCs from 40 different countries entering China through M&As from 2003 to 2013 provide considerable support to our predictions.