Abstract/Summary

Traditional international management theories do not account for the cognitive limitations and biases of decision-makers which bound their ability to make rational choices. Most theories have not truly accounted for firm heterogeneity, i.e. in the similar contexts, two firms may make different choices. This heterogeneity is not always rooted in differences in ‘firm-specific’ or ‘ownership’ advantages. We zoom in on how behavioural concepts, such as cognitive limitations, availability biases and heuristics, complement extant theorising. This chapter discusses the importance of using theories that make more realistic assumptions about decision makers and are thus more suited to claim managerial relevance.