This paper investigates how learning, either by a firm itself, from other business group members, or from competitors affects a firm's first as well as subsequent direct investment in a host country. By analyzing the data of Taiwanese electronic component firms' expansion in China from 1991 to 2001, this study finds that: (1) the local knowledge gained from the first entry contributes to a firm’s subsequent entry into that country; and. (2) the experiences transferred from other business group members and agglomeration effects from competitors also benefit a firm's subsequent investment in a host country. The overall results suggest that the foreign market presence of Taiwanese electronic component firms in a host country is characterized by sequential entry process.