Sample Selection and Theory Development: Implications of Firms' Varying Abilities to Appropriately Select New Ventures

Arturs Kalnins, Cornell University School of Hotel Administration

© Academy of Management. Reprinted with permission. All rights reserved.

Abstract

I highlight the need to consider sample selection when developing theory. When a sample is the result of a selection process, the process may be (1) generating empirical relationships consistent with a theoretical explanation that plays no causal role or (2) canceling out an empirical relationship actually generated by a causal process associated with a proposed theory. I argue that firms' varying abilities to appropriately select new ventures and select in or out of samples of such investments can lead to empirical misinterpretation and inappropriate theoretical conclusions.