However, in addition to the need to address the challenges of entering a new cultural bloc, EMNCs investing in developed markets must choose whether to remain within the industry with which they are familiar (i.
Accordingly, we consider home-country market sophistication and knowledge-based resources as important determinants of acquisitions by EMNCs in developed markets.
EMNCs with international acquisition experience are likely to be more familiar with local suppliers and customers, competitors and governments, and to have developed tacit knowledge about promotion channels, market segments, and marketing and distribution networks (Luo and Peng 1999; Johanson and Vahlne 2009).
Our arguments imply that Johanson and Vahlne's (1977) hypothesis of internationalisation in incremental fashion is valid for EMNCs investing in developed markets.
Thus, when the home-country resource environment is deficient in skilled labour, patents, research and technology, the variety of new opportunities and ideas to which EMNCs are exposed decreases and foreign investments are likely to be more exploitative in character.
This ensures that our analysis is not affected by the presence of a non-BRIC firm on the headquarter level, as hybrid EMNCs could rely on the mother company's country-specific advantages and experience.
The lack of significance for knowledge-intensive services may be the result of a lack of development of tertiary industries in emerging countries, which pushes EMNCs in medium and high-tech manufacturing industries to invest through related acquisitions more than EMNCs in service sectors.
We help to answer to this question by using the organisational learning perspective (March 1991; Barkema and Vermeulen 1998; Luo and Peng 1999) to study acquisitions undertaken by EMNCs in developed markets.
In line with the internationalisation process model, we find that when expanding in developed markets through related acquisitions, EMNCs benefit from knowledge obtained from multinational diversity and acquisition experience.
In these environments, local firms are exposed to diverse learning opportunities that enhance their knowledge base and absorptive capacity and, thus, their probability of acquiring firms in unrelated businesses, in other words, our results offer preliminary evidence that improvements in the domestic environment, which may be the result of home government policies and investments, may drive explorative learning that favours unrelated acquisitions by EMNCs in developed markets.
Within the eclectic paradigm, the specific knowledge and experience that EMNCs have developed through their previous experiences in international expansion can be viewed as an ownership-specific advantage (Dunning 1992; Luo and Peng 1999).
However, EMNCs also use greenfield investments and joint ventures to enter developed markets (albeit less often than MNCs from developed markets).