Antecedents and performance effect of managerial misperception of institutional differences

This study examines managerial misperception of institutional differences between countries—the deviation of managers’ perceived differences from actual ones. Drawing on a bounded-rationality perspective and an information-based view, we theorize about the effect and contextual antecedents of managerial misperception of country differences. Examining data from 186 managerial assessments confirms a negative relationship between managerial misperception and firms’ host-country performance, providing evidence for the relevance of this construct for international-management research and practice. Furthermore, in line with our theory, we find support for a direct impact of variables determining information-access opportunity and information-processing complexity as contextual antecedents of managerial misperception.