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This study examines experience conditions under which firms may or may not learn effectively from prior failures. Drawing on the literature on learning from failure, we argue that the characteristics of failed investments, such as location, ownership, size, and the timing of when failed investments take place influence the effectiveness of learning from failure experience. Using a longitudinal dataset of Korean foreign direct investments, we find a negative relationship between an multinational enterprise's prior failure experience and subsequent subsidiary mortality becomes stronger when investment size of failed investments increases and when failures take place during early stage of the firm's internationalization; however, it becomes weaker when cultural distance between the host country of failed investments and the home country increases and the percentage of joint venture among failed investments is large. This study contributes to the literature by specifying experience characteristics that moderate the effectiveness of learning from failures. [ABSTRACT FROM AUTHOR]

This study contrasts the means by which success- and failure-based experiential learning in corporate activities are impacted by three types of contextual dissimilarities that complicate learning: (i) the dissimilarity between the context where a firm originated and the contexts of prior events from which the firm accumulates experience in an activity; (ii) heterogeneity among prior events; and (iii) the dissimilarity between prior events and subsequent events to which a firm may apply its experience. We suggest that these three types of contextual dissimilarities affect success- and failure-based learning differently by having dissimilar effects on the facilitating mechanisms and barriers of the two types of learning. We use longitudinal data on the foreign direct investments conducted by Korean multinational enterprises and find that all three types of contextual dissimilarities negatively affect success-based learning, whereas the dissimilarities among prior events as well as between prior and subsequent events enhance failure-based learning. [ABSTRACT FROM AUTHOR]

Although the importance of cross-country culture has been widely acknowledged in international business (IB) literature, we have limited understanding about how culture distance at different levels influences multinational corporations (MNCs) management of subsidiaries. This paper contributes to culture related research by stressing cultural differences at the sub-national level and examining how cultural distances at both within-country and cross-country levels simultaneously influence MNCs resource allocation for innovation transfer projects between subsidiaries. Based on 1,439 dyadic innovation transfer projects between Korean MNC subsidiaries in China, we find that the within-country cultural distance between subsidiaries is positively related to headquarters resource allocation for innovation transfer projects, and this relationship is strengthened when the cross-country cultural distance between headquarters and the sending subsidiary increases. [ABSTRACT FROM AUTHOR]