Chapter 4: Strategies for Dealing with Heterogeneity in Entrepreneurship Research
* A FORMAL LOOK AT THE HETEROGENEITY PROBLEM Just like any other research, most entrepreneurship research deals at least in part with how one or more circumstances or factors (‘explanatory variables’) contribute to produce one or more outcomes (‘dependent variables’). The centrality and explicitness of focus on such causal relationships vary across research approaches and paradigms, but some ambition to suggest, unveil, or understand how various factors relate to entrepreneurial outcomes is usually represented in the research. For example, we may want to understand why individuals engage in a business start-up; what makes them persist in entrepreneurship through comeback after failure or becoming a habitual entrepreneur; or what makes them successful in entrepreneurial endeavors. Alternatively, we may be after explanations for ﬁrms’ diﬀerential growth and seek these in the resources, business model, and other characteristics of the ﬁrm itself as well as the conditions of its industry and its regional environment. In other cases still we may want to understand how the institutional conditions inﬂuence levels and content of entrepreneurial activity in a country. While also possibly embracing other aspects, all of these research interests include an element of causal relationships as displayed in Figure 4.1. As drawn, this ﬁgure depicts the simplest possible case (barring cases with fewer explanatory variables) where a number of explanatory variables (x) have direct and additive eﬀects on the dependent variable (y). There is no indication that the explanatory variables are correlated with one another. Hence, as a starting assumption (to be...
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