Learning Effect in Multinational Diffusion of Consumer Durables: An Exploratory Investigation Jaishankar Ganesh University of Central Florida V, Kumar Velavan Subramaniam University of Houston Literature reflects that a product~technological innovation introduced later in a country results in faster diffusion as the consumers in the lag market have an opportunity to learn about the new product from the consumers in the lead market. A systematic understanding of the learning that takes place between consumers in two countries--a pair of lead and lag countries--can provide insights for a firm's international market entry decisions. To provide a richer understanding of the underlying structure and patterns that govern this process, propositions linking factors (country characteristics, product/innovation charac- teristics, and time lag) to the learning process are drawn. Subsequently, these propositions are tested through an empirical investigation of the diffusion patterns of four consumer innovations in multiple European countries. The findings help provide some preliminary guidelines for manufacturers regarding selection of foreign markets and the timing and order-of-entry decisions. The introduction of new product innovations in foreign markets involves two major decisions--foreign market selection, and timing and order of entry. Douglas and Craig (1992) argue that there is a need for more research identi- fying new procedures for country selection and method- ologies for sales forecasting and demand estimation in a Journal of the Academy of Marketing Science. Volume 25, No. 3, pages 214-228. Copyright 9 1997 by Academy of Marketing Science. multicountry context. One approach toward addressing these critical needs would be to study the multinational diffusion patterns of products and technologies to derive insights on how new products diffuse in different cultures and why diffusion rates and market penetration differ between countries. Since different cultures react differ- ently to product innovations, an analysis of the diffusion patterns across cultures can provide insights into the choice of countries (and the timing and order-of-entry decisions) that are best suited for a firm, given its resource constraints and the nature of its product. Also, diffusion studies can help forecast sales potential in countries where the product is yet to be introduced. Interestingly, the need for newer methods for predicting diffusion rates in different cultures has long been identified as an important research priority in international business (Nehrt, Truitt, and Wright 1970; Wright and Ricks 1994). Despite this fact, there are very few published studies on this topic (Ganesh and Kumar 1996; Gatignon, Eliashberg, and Robertson 1989; Helsen, Jedidi, and DeSarbo 1993; Kalish, Mahajan, and Muller 1995; Takada and Jain 1991). The major research hurdle is a lack of reliable time-series data of product sales across multiple countries (Heeler and Hustad 1980). These few studies collectively form the knowledge pool in this area. Early studies (Gatignon et al. 1989; Takada and Jain 1991) examined the diffusion patterns of consumer dur- ables across multiple countries and showed that the diffu- sion of a new product is a culture-specific phenomenon and that the differences in the diffusion patterns across countries can be explained by certain country-specific factors. Further, Takada and Jain (1991) also observed that a lagged introduction of a product in a country leads to an