Power Law Distributions in Entrepreneurship: Implications for Theory and Research

18 Pages Posted: 15 Mar 2015

See all articles by G. Christopher Crawford

G. Christopher Crawford

Rutgers University; Ohio University

Herman Aguinis

University of Colorado at Denver - Health Sciences Center; Indiana University - Kelley School of Business - Management & Entrepreneurship

Benyamin Lichtenstein

University of Massachusetts Boston

Per Davidsson

Queensland University of Technology - Brisbane Graduate School of Business

Bill McKelvey

KEDGE Business School

Date Written: January 2, 2015

Abstract

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.

Keywords: Entrepreneurship, Generative mechanisms, Growth, Outliers, Power law distribution

Suggested Citation

Crawford, G. Christopher and Aguinis, Herman and Lichtenstein, Benyamin and Davidsson, Per and McKelvey, Bill, Power Law Distributions in Entrepreneurship: Implications for Theory and Research (January 2, 2015). Journal of Business Venturing 30(5) 696-713 doi:10.1016/j.jbusvent.2015.01.001; Kelley School of Business Research Paper No. 15-25. Available at SSRN: https://ssrn.com/abstract=2578029

G. Christopher Crawford (Contact Author)

Rutgers University ( email )

Janice H. Levin Bldg., Room 121
94 Rockafeller Road
Piscataway, NJ 08854-8054
United States
513-295-8717 (Phone)

Ohio University ( email )

Athens, OH 45701-2979
United States
5132958717 (Phone)

HOME PAGE: http://business.ohio.edu/about/faculty-staff/crawford-christopher/

Herman Aguinis

University of Colorado at Denver - Health Sciences Center ( email )

4200 E. Ninth Avenue
Denver, CO 80262
United States

Indiana University - Kelley School of Business - Management & Entrepreneurship ( email )

Bloomington, IN 47405
United States

Benyamin Lichtenstein

University of Massachusetts Boston ( email )

100 Morrissey Blvd
Boston, MA 02125
United States

Per Davidsson

Queensland University of Technology - Brisbane Graduate School of Business ( email )

Brisbane
Australia
+61 7 3864 2051 (Phone)
+61 7 3864 1299 (Fax)

HOME PAGE: http://www.qut.edu.au/ph_server_query.do

Bill McKelvey

KEDGE Business School ( email )

Domaine de Luminy - BP 921
BP 921
Marseille, PACA 13288
France

Register to save articles to
your library

Register

Paper statistics

Downloads
129
Abstract Views
819
rank
224,425
PlumX Metrics