The goal of understanding how accumulated acquisition experience affects future acquisition performance has taken center stage in the discourse between organizational and strategy scholars. A considerable literature has pointed out that learning from acquisition experience is quite difficult; acquisitions are complex strategic decisions prone to causal ambiguitydwhich undermines learning from experience, because it obscures the causal link between how a certain acquisition was conducted and its final outcome (Heimeriks, Duysters, & Vanhaverbeke, 2007; March & Olsen, 1975; Mosakowski, 1997; Zollo, 2009).

However, past research has generally neglected that acquisitions are decisions composed of multiple stages and that these stages might differ in their level of causal ambiguity, such that past acquisition experience might translate into learning to perform some stages more than others. In particular, based on extant literature, we may separate the acquisition process into at least two distinct stages (Barkema & Schijven, 2008b; Puranam, Powell, & Singh, 2006), each of which contributes to final financial performance. The first is the selection stage, during which an acquiring firm strives to reduce information asymmetry between itself and a potential target so that it can more accurately assess the target firm’s value (Capron & Shen, 2007; Puranam et al., 2006). The second is the restructuring stage, during which an acquiring firm endeavors to build up an acquisition’s actual value using corporate restructuring (Barkema & Schijven, 2008b; Heimeriks, Schijven, & Gates, 2012).

We argue that acquisition experience mainly teaches firms to select targets rather than to restructure them, since causal ambiguity will be higher during the restructuring stage than during the selection stage. This will be true for at least two reasons. First, the restructuring stage will be relatively more complex because it includes more activities and those activities are more interrelated (King, 2007). Second, after the restructuring stage ends, feedback about its outcome will be more delayed (King, 2007) than feedback from the selection stage. Experiential learning suffers when causal ambiguity increases (March & Olsen, 1975; Mulotte, Dussauge, & Mitchell, 2013). Thus, we can expect that firms engaging in acquisitions are likely to learn more about how to properly execute the selection stage (where causal ambiguity is lower) than about how to properly implement the restructuring stage (where causal ambiguity is higher). If this is true, we should observe that firms with a longer history of acquisitions perform particularly well in cases where the external environment in which the target is evaluated is “opaque” and thus the ability to select (versus the ability to restructure) becomes more crucial.