Indirect Learning: How Emerging-Market Firms Grow in Developed Markets

Some emerging-market firms have recently achieved substantial growth in developed markets despite having had little prior experience in these markets. What explains the performance of these firms? Building on the organizational learning literature, the authors argue that indirect learning (i.e., lea...

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Bibliographic Details
Published inJournal of marketing Vol. 79; no. 1; pp. 10 - 28
Main Authors Banerjee, Sourindra, Prabhu, Jaideep C., Chandy, Rajesh K.
Format Journal Article
LanguageEnglish
Published Chicago American Marketing Association 01.01.2015
SAGE PUBLICATIONS, INC
Subjects
Business growth
Commercial space ventures
Comparative analysis
International trade
Management theory
Organizational learning
Studies
United Kingdom > UK
India
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Summary:Some emerging-market firms have recently achieved substantial growth in developed markets despite having had little prior experience in these markets. What explains the performance of these firms? Building on the organizational learning literature, the authors argue that indirect learning (i.e., learning from the experience of others) plays a crucial role in explaining this phenomenon. Specifically, they propose that emerging-market firms that grow in developed markets overcome their lack of direct experience in such markets by learning indirectly through their leaders, competitors, and interfirm networks. The authors test their thesis by comparing the international growth in developed markets of a sample of emerging-market firms (116 Indian firms) with a sample of developed-market firms (160 U.K. firms). The results support the authors' thesis about the importance of indirect learning in explaining the international growth of emerging-market (relative to developed-market) firms in developed markets. The authors discuss the implications of these findings for policy makers in the areas of higher education, competition policy, and international trade as well as for managers in the areas of middle-management recruitment, competitor analysis and tracking, and managing interfirm networks.
ISSN:0022-2429
1547-7185
DOI:10.1509/jm.12.0328