Vicarious Learning: How Entrepreneurs Enhance a Firm's International Competitiveness Through Learning From Interlocking Director Network Partners.

Zaiyang Xie,Jie Wang,Runhui Lin,Ling Miao,Weiwei Hu

doi:10.3389/fpsyg.2020.00689

Abstract

Applying the lens of entrepreneurial psychology, this paper examines vicarious learning as an approach that entrepreneurs can use to overcome external uncertainty of overseas investments by accumulating international know-how and experience through interlocking director connections with other experienced companies. Through the analysis of a sample of Chinese companies, our findings suggest that entrepreneurs obtaining foreign experience from interlocking partners can significantly promote their firm’s international growth when investing in the same country, and that this positive effect is significant in relation to both first-degree and second-degree connections. We further find that, if an entrepreneur makes a connection with an interlocking partner in the same industry, it enhances their knowledge absorption, thereby providing a positive moderating effect, while investing in a country with a strong degree of openness weakens the effect of knowledge application, and thus plays a negative moderating role. This study makes practical and theoretical contributions by exploring specific vicarious learning means for entrepreneurs to enhance their firm’s international competitiveness, and also identifying three different learning processes.

Highlights

Increasing numbers of entrepreneurs in emerging markets are starting companies through which they are able to make significant contributions to their country’s regional and social economic growth
To advance vicarious learning research within the domain of entrepreneurship psychology, the present study focuses on the way in which entrepreneurs can learn from other companies by building up an interlocking directors’ network
Regarding the vicarious learning through which entrepreneurs accumulated cross-border acquisitions (CBAs) knowledge from interlocking partners, about twice as much knowledge was obtained through second-degree connections as through first-degree connections, suggesting that a greater number of companies being connected offers enhanced opportunities to obtain international knowledge and information via second-degree connections

Summary

Introduction

Increasing numbers of entrepreneurs in emerging markets are starting companies through which they are able to make significant contributions to their country’s regional and social economic growth Alongside this positive role of entrepreneurship, there exists a great deal of pressure and there are many uncertainties to be faced when competing for a higher market position (Frese and Gielnik, 2014). Researchers have contended that learning from others— “vicarious learning”—is one of the most effective ways for firms acquiring and accumulating knowledge to deal with external uncertainty Under this approach, a firm obtains knowledge by observing the behaviors, actions, and results of the learning objects, and this acquired knowledge influences the behavioral patterns, decisionmaking, and performance results of the organization itself (Miner and Haunschild, 1995; Myers, 2018).

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