Learning from experience and learning from others: how congenital and interorganizational learning substitute for experiential learning in young firm internationalization

Abstract This article addresses a critical issue for entrepreneurs and managers pursuing internationalization strategies: how firms can accumulate the knowledge and skills required for successful international expansion. Specifically, we examine how young firms may compensate for their lack of firm‐level international experience by utilizing other sources of knowledge. Drawing on organizational learning theory, we develop an integrative framework that looks at the joint and interactive effects of experiential learning by the firm, the management team's pre‐start‐up international experience (i.e., congenital learning), and interorganizational learning from key exchange partners (customers, suppliers, investors, etc.). Utilizing empirical data on 114 young, technology‐based firms in Flanders, Belgium, we find that a firm's level of international experience negatively moderates the effects of congenital and interorganizational learning on the extent of internationalization. That is, the lower a firm's experiential learning, the more significant the effects of the start‐up team's prior international knowledge base and the knowledge and skills acquired through key partners. These results make important theoretical and empirical contributions to the international entrepreneurship and organizational learning literatures by highlighting some of the factors underlying learning advantages of newness that facilitate the internationalization of young firms and by explicating substitutive interrelationships among different learning mechanisms. Copyright © 2010 Strategic Management Society.