Whereas the creation and emergence of high-growth firms are central topics in entrepreneurship research, senior scholars lament the absence of a comprehensive theory to explain and predict this rare phenomenon. Counter to the assumptions of normal distributions and independent observations, we develop hypotheses that entrepreneurial outcomes are distributed according to a powerlaw, where interdependence and extreme outliers have a disproportionate and co-evolutionary effect on the environment. Tests on six different outcome measures within the Panel Study of Entrepreneurial Dynamics II, Kauffman Firm Survey, and Inc. 5000 find that power-law distributions pervade the domain. We use a complexity science perspective to explain these results, which provide an empirically validated foundation for future theory-building efforts.
Crawford, G. Christopher and McKelvey, Bill
"STRATEGIC IMPLICATIONS OF POWER-LAW DISTRIBUTIONS IN THE CREATION AND EMERGENCE OF NEW VENTURES: POWER-LAW ANALYSES IN THREE PANEL STUDIES,"
Frontiers of Entrepreneurship Research: Vol. 32
, Article 1.
Available at: http://digitalknowledge.babson.edu/fer/vol32/iss12/1