IDEAS home Printed from https://ideas.repec.org/a/eee/jobuve/v9y2018icp53-59.html
   My bibliography  Save this article

Enhancing simulation-based theory development in entrepreneurship through statistical validation

Author

Listed:
  • Breig, Roman
  • Coblenz, Maximilian
  • Pelz, Michael

Abstract

Recent research has called for new theory development because variables in entrepreneurship have been shown to follow power laws. Usually, simulation is used to validate these new theories. However, validation has been insufficient because it fails to provide a quantitative comparison of distribution parameters. This neglect can cause misleading conclusions. To address this insufficiency, we contribute a four-step method: the possible simulation parameter range (PSPR). The fundamental advantage of the method is to compare distribution parameters of both empirical data and simulation results. We demonstrate the method's usefulness with an illustrative example.

Suggested Citation

  • Breig, Roman & Coblenz, Maximilian & Pelz, Michael, 2018. "Enhancing simulation-based theory development in entrepreneurship through statistical validation," Journal of Business Venturing Insights, Elsevier, vol. 9(C), pages 53-59.
    • Handle: RePEc:eee:jobuve:v:9:y:2018:i:c:p:53-59
    DOI: 10.1016/j.jbvi.2018.02.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2352673417301038
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbvi.2018.02.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Keiki Takadama & Tetsuro Kawai & Yuhsuke Koyama, 2008. "Micro- and Macro-Level Validation in Agent-Based Simulation: Reproduction of Human-Like Behaviors and Thinking in a Sequential Bargaining Game," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 11(2), pages 1-9.
    2. Brian Heath & Raymond Hill & Frank Ciarallo, 2009. "A Survey of Agent-Based Modeling Practices (January 1998 to July 2008)," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 12(4), pages 1-9.
    3. 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, Elsevier, vol. 30(5), pages 696-713.
    4. Barabási, Albert-László & Albert, Réka & Jeong, Hawoong, 1999. "Mean-field theory for scale-free random networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 272(1), pages 173-187.
    5. Christopher Crawford, G. & McKelvey, Bill & Lichtenstein, Benyamin B., 2014. "The empirical reality of entrepreneurship: How power law distributed outcomes call for new theory and method," Journal of Business Venturing Insights, Elsevier, vol. 1, pages 3-7.
    6. Shim, Jaehu, 2016. "Toward a more nuanced understanding of long-tail distributions and their generative process in entrepreneurship," Journal of Business Venturing Insights, Elsevier, vol. 6(C), pages 21-27.
    7. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    8. Pierpaolo Andriani & Bill McKelvey, 2009. "Perspective ---From Gaussian to Paretian Thinking: Causes and Implications of Power Laws in Organizations," Organization Science, INFORMS, vol. 20(6), pages 1053-1071, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dean A. Shepherd & Johan Wiklund, 2020. "Simple Rules, Templates, and Heuristics! An Attempt to Deconstruct the Craft of Writing an Entrepreneurship Paper," Entrepreneurship Theory and Practice, , vol. 44(3), pages 371-390, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Crawford, G. Christopher & Joo, Harry & Aguinis, Herman, 2024. "Under the weight of heavy tails: A power law perspective on the emergence of outliers in entrepreneurship," Journal of Business Venturing Insights, Elsevier, vol. 21(C).
    2. Crawford, G. Christopher & Linder, Christian & Lechner, Christian & Villani, Elisa, 2024. "Outlier entrepreneurs: Nonlinear paths and novel ventures," Journal of Business Venturing Insights, Elsevier, vol. 21(C).
    3. Gala, Kaushik & Schwab, Andreas & Mueller, Brandon A., 2024. "Star entrepreneurs on digital platforms: Heavy-tailed performance distributions and their generative mechanisms," Journal of Business Venturing, Elsevier, vol. 39(1).
    4. Booyavi, Zahra & Crawford, G. Christopher, 2023. "Different, but same: A power law perspective on how rock star female entrepreneurs reconceptualize “gender equality”," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    5. Shim, Jaehu, 2016. "Toward a more nuanced understanding of long-tail distributions and their generative process in entrepreneurship," Journal of Business Venturing Insights, Elsevier, vol. 6(C), pages 21-27.
    6. Lu, Jinfeng & Dimov, Dimo, 2023. "A system dynamics modelling of entrepreneurship and growth within firms," Journal of Business Venturing, Elsevier, vol. 38(3).
    7. Bent Flyvbjerg & Alexander Budzier & Jong Seok Lee & Mark Keil & Daniel Lunn & Dirk W. Bester, 2022. "The Empirical Reality of IT Project Cost Overruns: Discovering A Power-Law Distribution," Papers 2210.01573, arXiv.org.
    8. Shige Makino & Christine M. Chan, 2017. "Skew and heavy-tail effects on firm performance," Strategic Management Journal, Wiley Blackwell, vol. 38(8), pages 1721-1740, August.
    9. Dimov, Dimo & Pistrui, Joseph, 2024. "Dynamics of entrepreneurial well-being: Insights from computational theory," Journal of Business Research, Elsevier, vol. 172(C).
    10. Lahr, Henry, 2023. "Fat tails in private equity fund returns: The smooth double Pareto distribution," International Review of Financial Analysis, Elsevier, vol. 86(C).
    11. Clark, Daniel R. & Crawford, G. Christopher & Pidduck, Robert J., 2023. "Exceptionality in entrepreneurship: Systematically investigating outlier outcomes," Journal of Business Venturing Insights, Elsevier, vol. 20(C).
    12. Christopher J. Boudreaux & Anand Jha & Monica Escaleras, 2023. "Natural disasters, entrepreneurship activity, and the moderating role of country governance," Small Business Economics, Springer, vol. 60(4), pages 1483-1508, April.
    13. Khurana, Indu & Tamvada, Jagannadha Pawan & Audretsch, David B., 2023. "The weaker sex? A tale of means and tails," Journal of Business Venturing Insights, Elsevier, vol. 20(C).
    14. Joseph Farhat & Sharon Matusik & Alicia Robb & David T. Robinson, 2018. "New directions in entrepreneurship research with the Kauffman Firm Survey," Small Business Economics, Springer, vol. 50(3), pages 521-532, March.
    15. Mary Han & Bill McKelvey, 2016. "How to Grow Successful Social Entrepreneurship Firms? Key Ideas from Complexity Theory," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 24(03), pages 243-280, September.
    16. Gala, Kaushik & Valladares, Carlos D. & Mueller, Brandon A., 2023. "Students' assumptions of Entrepreneurs’ performance: The paradox of excess entry and missed opportunity," Journal of Business Venturing Insights, Elsevier, vol. 20(C).
    17. Luis Medrano-Adán & Vicente Salas-Fumás, 2022. "The added value of management skill in the explanation of the distribution of firm size," Small Business Economics, Springer, vol. 58(3), pages 1379-1405, March.
    18. James Caton, 2017. "Entrepreneurship, search costs, and ecological rationality in an agent-based economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(1), pages 107-130, March.
    19. 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, Elsevier, vol. 30(5), pages 696-713.
    20. Shim Jaehu & Bliemel Martin, 2018. "Ignition of New Product Diffusion in Entrepreneurship: An Agent-Based Approach," Entrepreneurship Research Journal, De Gruyter, vol. 8(2), pages 1-17, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jobuve:v:9:y:2018:i:c:p:53-59. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-business-venturing-insights .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.