Research on post-entry change has gained traction lately and we argue that the diversity of a firm’s home base and the underlying learning mechanism have a positive effect on commitment increases. Specifically, we expect that when a firm enters a new host country, its international experiences become more diverse and thus it can leverage a broader knowledge base to learn from and subsequently increase extant foreign commitments (i.e., assets). We further examine the moderating effects of parent firm industry diversity as well as knowledge intensity of the newly added foreign activity and expect both factors to negatively influence the diversity-commitment relation. In our dataset of 13,069 Austrian companies investing abroad between 1989 and 2019, we find support for the main effect and the negative knowledge intensity moderator, and – opposite to our hypothesis – a significant positive effect for the industry diversity moderator.
