Power law distributions in entrepreneurship : implications for theory and research

Crawford, G. Christopher, Aguinis, Herman, Lichtenstein, Benyamin, Davidsson, Per, & McKelvey, Bill (2015) Power law distributions in entrepreneurship : implications for theory and research. Journal of Business Venturing, 30(5), pp. 696-713.

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A long-held assumption in entrepreneurship research is that normal (i.e., Gaussian) distributions characterize variables of interest for both theory and practice. We challenge this assumption by examining more than 12,000 nascent, young, and hyper-growth firms. Results reveal that variables which play central roles in resource-, cognition-, action-, and environment-based entrepreneurship theories exhibit highly skewed power law distributions, where a few outliers account for a disproportionate amount of the distribution's total output. Our results call for the development of new theory to explain and predict the mechanisms that generate these distributions and the outliers therein. We offer a research agenda, including a description of non-traditional methodological approaches, to answer this call.

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13 citations in Scopus
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11 citations in Web of Science®

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ID Code: 81245
Item Type: Journal Article
Refereed: Yes
Keywords: Entrepreneurship, Generative Mechanisms, Growth, Outliers, Power Law Distribution, Theory Development
DOI: 10.1016/j.jbusvent.2015.01.001
ISSN: 0883-9026
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300) > Entrepreneurship (150304)
Divisions: Current > Research Centres > Australian Centre for Entrepreneurship
Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Management
Copyright Owner: Copyright 2015 Elsevier
Copyright Statement: This is the author’s version of a work that was accepted for publication in Journal of Business Venturing. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Business Venturing, [in press] DOI: 10.1016/j.jbusvent.2015.01.001
Deposited On: 27 Jan 2015 22:31
Last Modified: 14 Dec 2015 07:43

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