Learning to expand or expanding to learn? The role of imitation and experience in the choice among several expansion modes

SummaryThis paper examines how firms choose among alternative modes of development in the context of horizontal growth. We suggest that mergers and acquisitions (M&As) as well as alliances formation are influenced by both internal and external factors. More precisely, we investigate the role of imitation and experience as distinct learning mechanisms, both separately and simultaneously. Using isomorphism theoretical background, we show that the choice of expansion mode is highly influenced by competitor moves. We confirmed most of our hypotheses empirically with a sample of 83 firms from the retail industry from 1984 through 2003. Our results also show that imitation mechanism differ whether we consider M&As or alliances.