Research Insights: Follow the leader—or not

How corporations make location choices when growing internationally—imitating the market leader or going their own way—is of interest to firms trying to predict competitors’ global strategies. An assumption has been that all firms learn from international experience in similar ways. But recent research by Saunders assistant professor of management Ettore Spadafora, Ph.D., finds variability in how firms interpret and assess experience, and thus whether or not they imitate market leaders when making location choices.

In an article published in Global Strategy Journal, “International experience and imitation of location choices: The role of experience interpretation and assessment and its board-level microfoundations,” Spadafora and his co-authors studied 58 Italian ceramic tile manufacturers. They gathered quantitative data about the firms’ boards and location choices, and interviewed industry experts. Based on their analysis, they confirmed that companies with less international experience are more likely to follow the market leader, while those internationally experienced are more likely to follow their own path.  In addition, the negative relationship between international experience and imitation of location choices is positively moderated by low board turnover, younger board members, and smaller board equity ownership.

Spadafora’s research has implications for firms seeking to blaze their own trail toward internationalization, especially with attention to board-level factors.

View the paper published by the Global Strategy Journal, March 24, 2022: International experience and imitation of location choices: The role of experience interpretation and assessment and its board-level microfoundations.