Bridging the Experience Gap: Cognitive Biases and Heuristics in the Internationalization of Small Firms

Purpose Research on early internationalization in smaller firms has primarily focused on initial market entry, often neglecting responses to adverse post-entry events. This paper addresses the gap between entrepreneurial internationalization and small business survival by examining both initial and post-entry stages through decision-maker cognition. Design/methodology/approach This conceptual paper develops a cognition-based decision framework that explains how cognitive biases influence pre- and initial entry decisions, and evolve in response to post-entry negative events. It introduces the "experience gap paradox"- a misalignment between personal experience and required international market experience - as a key driver of biased judgment. The framework links non-contextualized pre-entry experience with post-entry decision-making, offering testable propositions on the dynamic interplay between biases, heuristics, and internationalization decisions. Findings This model supports the argument that heuristic decision-making is contingent upon context-specific prior experience, which leaders of small firms typically lack pre-entry, causing them to develop and rely on decision biases. Originality/value This article contributes by exploring how cognitive heuristics and biases evolve in decision-making across the pre-entry and post-entry stages of internationalization, with a focus on smaller firms-particularly International New Ventures (INVs). It provides a comprehensive understanding of the "experience gap paradox" and its influence on entrepreneurial internationalization, offering insights relevant to small firms' adaptive decision-making and survival.