In this important and timely book, Bart Nooteboom develops and applies a social cognitive theory of firms and organizations with a focus on learning and innovation.Why explore a cognitive theory of the firm? This enlightening study explains that a cognitive theory of the firm is required in order to lend more substance and analysis to current vague and unconnected ad hoc notions in the literature, such as entrepreneurial vision, absorptive capacity, and variety and dispersion of knowledge. The author explores the notion of differential cognition, drawing together the work of Hayek, Schumpeter and Penrose to shed light on the sources of innovation.This interdisciplinary book connects ideas from specific branches of economics, management and organization, cognitive science, social psychology and sociology and will be invaluable to students and scholars interested in a new perspective on the firm.