The Emergence ofEvidence-BasedEntrepreneurshipMichael FreseDenise M. RousseauJohann Wiklund

Many companies and leaders show little interest in subjecting their business practicesand decisions to the same scientific rigor they would use for technical or medicalissues (Pfeffer & Sutton, 2006, p. 12).

Introduction

Evidence-based entrepreneurship (EBE) pursues the science-informed practice ofentrepreneurship. A prerequisite is the systematic accumulation and interpretation of thebody of evidence from entrepreneurship scholarship (Rauch & Frese, 2006). EBE buildson insights from the related practice of evidence-based management (EBMgt, (Rousseau,2012), itself influenced by evidence-based approaches in medicine, criminology, andother fields.

At the same time, we must ask to what extent entrepreneurship can make use ofthe still controversial ideas of EBMgt. EBMgt combines four fundamental practices inmaking everyday managerial judgments and decisions: (1) use of the best availablerelevant scientific findings, (2) systematic attention to organizational facts, indicators, andmetrics, (3) ongoing practice of critical, reflective judgment, and use of decision aids inorder to improve decision quality, (4) consideration of ethical issues, in particular, theimpact of decisions on their many stakeholders (Rousseau, 2012, pp. 4, 5).

This special issue takes stock of the current state of EBE as well as the opportunitiesand limits of modeling it after evidence-based practice in other fields. Importantly,differences between entrepreneurship and other fields are noteworthy. EBE faces chal-lenges that are not equally present in the fields of management or medicine. First is thetypical requirement in evidence-based practice to establish standards based on the bestavailable evidence. For example, evidence-based medicine may lead to the recommenda-tions that reduce variability in practice, such that doctors deliver a particular treatment fora certain diagnosis in a well-specified fashion. Entrepreneurship, on the other hand, dealswith generating novelty and being different from other participants in the market. So the

Please send correspondence to: Michael Frese, tel.: ••; e-mail: michfrese@gmail.com, to Denise M. Rousseauat denise@cmu.edu, and to Johann Wiklund at jwiklund@syr.edu.

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actual behavior entrepreneurs demonstrate may need to differ from other entrepreneurs,managers, and people in general in order to be truly entrepreneurial (Sarasvathy, Simon,& Lave, 1998). This may imply that entrepreneurs deviate from what is typically thoughtto be good management practice. Entrepreneurs are often opportunistic. They basedecisions not on careful deliberations of pro and con, but on fast heuristics (Busenitz &Alvarez, 2007) and rely on improvisation (Baker & Nelson, 2005). Thus, it is plausiblethat evidence-based recommendations concerning entrepreneurship may be appropriatelymade only at higher levels of abstraction than found in other evidence-based fields. Forexample, entrepreneurs may be well advised to improvise in facing novel circumstanceswhile physicians and managers may be guided by recommendations to run a series ofexperiments to see which best approximates the desired outcome (Rousseau, 2012;Sarasvathy, 2001),

Second, dissemination of knowledge poses a particular challenge in entrepre-neurship. The number of entrepreneurs, however defined, is large and constitutes a veryheterogeneous group of people. There are no credentialing systems for entrepreneurs,and no required programs or professional schools for them to enroll in before startingtheir businesses. In effect, passing information on to practicing and prospective entre-preneurs is difficult. Nonetheless, most advanced economies have extensive entrepreneur-ship policies that can be influenced by evidence-based insights and recommendationswhich then have effects on entrepreneurs. Similarly, venture capitalists and banks can bereached by evidence-based approaches which in turn will influence how entrepreneursbehave.

Public policy institutions play an important role in the further development of EBE.Most nations have programs that provide support to entrepreneurs, new ventures, andsmall businesses. By designing such programs to allow appropriate evaluation of theiroutcomes (cf. Storey, 1998), these institutions can contribute to the establishment ofEBE. We note that many programs would lend themselves to be designed as randomizedcontrolled experiment; in particular those that involve awarding grants and/or providingtraining and guidance. This would be ideal for establishing not only the effectiveness ofgovernment programs, but more importantly also what constitutes effective entrepreneur-ship and management of entrepreneurial firms more broadly.

Promoting Evidence-Based Entrepreneurship

With these challenges in mind, we turn to the ways we believe EBE might beeffectively promoted. A first step is to take stock of what we know. The most viablestrategy for taking stock of the scholarly literature is to systematically review it to identifyevidence relevant to important practice questions in entrepreneurship. Such reviews maytake the form of meta-analyses (Hunter & Schmidt, 2004) that generate non-biasedestimates of relationships that matter to entrepreneurship practice and/or policy. Meta-analyses establish the empirical literature’s best estimate of the existence, strength, andconsistency in the relationship(s) between practically useful variables. A recent reviewtallied over 20 meta-analyses in the area of entrepreneurship (Frese, Bausch, Schmidt,Rauch, & Kabst, 2012). Sample research questions that have been studied with the helpof meta-analyses are the relationship of how personality contributes to entrepreneurship(e.g., Rauch & Frese, 2007), whether planning helps entrepreneurial firms to be successful(Brinckmann, Grichnik, & Kapsa, 2010), how training and which kind of training isrelated to entrepreneurial success (Martin, McNally, & Kay, 2013), on strategic stance

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such as entrepreneurial orientation (Rauch, Wiklund, Lumpkin, & Frese, 2009) or inno-vation (Rauch et al.). And, indeed, there are also examples of meta-analyses in this specialissue (below).

Apart from taking stock of what already exists, EBE needs to encourage research togenerate new knowledge to inform the decisions, processes, and activities of entrepre-neurs (Stokes, 1997). Other fields such as medicine, clinical psychology, and organiza-tional psychology, have linked different research designs with degrees of evidence in orderto promote more useful research (Cook, Campbell, & Peracchio, 1990).

As in the case of evidence-based medicine, the randomized controlled experiment canprovide high-quality evidence of what works to promote effective entrepreneurial prac-tice. (N.B. with randomization, at the start of the experiment the group receiving theintervention is exactly comparable to the control group. The only difference between themis the intervention). Economists now increasingly use controlled randomized experiments,particularly when studying the efficacy of interventions for entrepreneurs in developingcountries (Banerjee & Duflo, 2011; Karlan & Appel, 2011). Excellent examples includeproviding microcredits in developing countries showing a high return on investment inmicro-businesses (de Mel, McKenzie, & Woodruff, 2008). Research on the effects oftraining also uses randomized controlled experiments (Glaub & Frese, 2011; McKenzie &Woodruff, 2012). There are a few examples in which training concepts have been shownto provide better approaches to entrepreneurship and higher success rates (Gielnik et al.,in press, 2014). More such studies employing controlled randomized experiments wouldbe very beneficial for the establishment of EBE. It attests to the rare nature of these studiesthat there was no submission of such an experiment to our special issue.

Careful longitudinal studies, in particular panel studies, are also critical. The call forlongitudinal studies is by no means new, and the advantages of such designs are well-established including the possibility to study processes that unfold over time (Hassett &Paavilainen-Mäntymäki, 2013). A problem of longitudinal research designs is that datacollection of course takes time and is expensive. Fortunately for entrepreneurship schol-ars, large-scale initiatives such as the Panel Study of Entrepreneurial Dynamics (PSED[e.g., Reynolds, 2010]) and the Kauffman Firm Survey (KFS [e.g., Coleman & Robb,2009]) are now publically available for use in research. Although such initiatives arecostly, we strongly encourage additional efforts to build longitudinal databases. Giventhe price tag, pooling of resources as done for the PSED is a valuable way forward in theestablishing EBE.

Articles Included in This Special Issue

Four meta-analyses develop new knowledge in the field of entrepreneurship. The firstmeta-analysis is by Bae, Qian, Miao, and Fiet, and examines the relationship betweenentrepreneurship education and intentions (“The relationship between entrepreneurshipeducation and entrepreneurial intentions: A meta-analytic review”). Its first finding is thatthe correlation between business education and intention is smaller than the one forspecific entrepreneurship education—a finding that one would expect. Its second impor-tant finding is that in general, the correlations between entrepreneurship and businesseducation with intentions are lower than most entrepreneurship researchers would expect.A further finding is that cultural practices influence the size of the correlations signifi-cantly. However, the most important finding for practice is a near zero and nonsignificantrelationship between entrepreneurial/business education and the intention to start a busi-ness, when prior intentions are controlled for. This means that by and large, students come

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into entrepreneurship with a certain entrepreneurial intention and leave that program withthat same intention. Thus, a reverse causation argument is more likely supported here; theintention to start a business determines whether somebody takes a course in business orentrepreneurship, and there is no change of entrepreneurial intention because of educa-tion. Of course, as in all meta-analyses on entrepreneurship, there is a high degree ofheterogeneity in the empirical correlations. This implies that policy makers have toassume differentiated response to education, and researchers need to do much moreresearch to find the best way to increase entrepreneurial intentions. But at least wecan conclude: Not all is well in the “state of entrepreneurship and business education,”and future studies need to develop ideas, specifically on what influences entrepreneurialintentions and entrepreneurial behaviors, and new research is called for in this area.

The second meta-analysis addresses cultural and macroeconomic moderators ofthe relationship between entrepreneurial orientation and entrepreneurial performance(Saeed, Yousafzai, & Engelen: “On cultural and macroeconomic contingencies of theentrepreneurial orientation–performance relationship”). There are, indeed, moderatorsof the relationship, which includes cultural moderators (such as uncertainty avoidance,power distance, and in-group collectivism), as well as politico-economic moderators(such as developing country and political stability). It is important to note that even afterthe introduction of moderators, there is still a sizeable heterogeneity of correlations left,suggesting that there is need to look at other moderators for researchers and for practi-tioners to assume that there are important contextual conditions which are at this pointscientifically unknown.

A different type of analysis is presented in Schlaegel and Koenig in “Determinants ofentrepreneurial intent: A meta-analytic test and integration of competing models.” Entre-preneurial intentions have been extensively studies, often as a proxy for actual behavior.Different models intended to explain such intentions have been proposed. Schlaegel andKoenig test the predictive power of the two most common theoretical models, and thenintegrate them into a more powerful yet parsimonious model. Their findings that somecommonly used variables influence intentions to a large extent, and other variables onlyto a small extent have implications for scholars, entrepreneurs, and educators alike. Forexample, it is valuable for the owners of a family business to know what makes theirchildren more or less interested in pursuing entrepreneurship.

The article “A qualitative approach to evidence-based entrepreneurship: Theoreticalconsiderations and an example involving business clusters” by Rauch, van Doorn, andHulsink outlines principles, guidelines, and examples for synthesizing the findings ofqualitative research. Thus, this is the qualitative meta-analysis reported in evidence-basedmanagement and entrepreneurship. As in quantitative aggregations, the purpose is togeneralize findings. Individual case studies and qualitative research more generally typi-cally don’t seek such generalizations, but the novel approach presented herein allows forit. Given the strengths of case studies when it comes to providing contexts to findings, andshedding light on minority phenomena, such qualitative synthesizing of findings comple-ments quantitatively-based EBE.

Next, in the article “Creating the future together: Toward a framework for researchsynthesis in entrepreneurship,” van Burg and Romme suggest a research synthesis, to takestock of findings from entrepreneurial research on exploitation of opportunities andthe results achieved. A research synthesis assesses the body of work relevant to a practicalquestion where both qualitative and quantitative studies are considered (Rousseau,Manning & Denyer, 2008). Importantly, van Burg and Romme demonstrate the anteced-ents of opportunities, their exploitation and performance (such as entrepreneur’s personalcharacteristics and beliefs as well as external and organizational factors), but also the

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Sticky Note

not 2012 but 2013

programs, entrepreneurship policy makers, providers of capital for new ventures, andpractitioners who are willing and able to expand their knowledge and expertise. Consul-tants to entrepreneurial firms also would do well to consult EBE before they are advisingentrepreneurs on one remedy or another. Of course, the recipients of suggestions byconsultants may also be critical customers in the sense of examining results beforeagreeing to follow the consultants’ advice. We (the authors) ourselves regularly consultarticles and abstracts disseminated by the Cochrane foundation before taking medicineprescribed by physicians or undergoing an operation. Such abstracts are plentiful inmedicine and highly informative to people who understand a little statistics; and they arealso free. We anticipate a time in which science provides similar services to managersand entrepreneurs. Similar to medicine, people will understand that context issues areimportant and that in the last analysis, the individual case needs to be considered beforesuggesting new behaviors and other advice to entrepreneurs; however similar to medicine,people will become better consumers of such advice if they know the average outcomesthat have occurred from following it as reported in the literature.

Last, we propose that entrepreneurs make more regular use of the data they alreadyhave in order to enhance their practice. The study of entrepreneurial practice and inparticular the reciprocal link between entrepreneurial action and environmental feedbackis hugely important input to EBE. Data that already exist in entrepreneurial firms may beused in a more reflective fashion when EBE ideas become prevalent. One of the mostadmired firms—Google—has developed an evidence-based approach to presentation ofInternet sites, marketing, and management and has grown considerably on the basis of astrict empirical approach.

The articles presented in this special issue attests to the richness of approaches thatcan help furthering EBE. We hope this issue inspires others to provide further evidenceregarding entrepreneurial practices that work (and those that don’t) and under whatconditions.

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Banerjee, A.V. & Duflo, E. (2011). Poor economics: A radical rethinking of the way to fight global poverty.New York City: Public Affairs, Perseus Books Group.

Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the castle? Ameta-analysis on contextual factors impacting the business planning–Performance relationship in small firms.Journal of Business Venturing, 25, 24–40.

Cook, T.D., Campbell, D.T., & Peracchio, L. (1990). Quasi experimentation. In M.D. Dunnette & L.M. Hough(Eds.), Handbook of industrial and organizational psychology (2nd ed., Vol. 1, pp. 491–576). Palo Alto, CA:Consulting Psychologists Press.

de Mel, S., McKenzie, D., & Woodruff, C. (2008). Returns to capital in microenterprises: Evidence from afield experiment. Quarterly Journal of Economics, 123, 1329–1372.

Frese, M., Bausch, A., Schmidt, P., Rauch, A., & Kabst, R. (2012). Evidence-based entrepreneurship (EBE):Cumulative science, action principles, and bridging the gap between science and practice. Foundations andTrends in Entrepreneurship, 8, 1–62.

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Gielnik, M.M., Frese, M., Kahara-Kawuki, A., Katono, I.W., Kyejjusa, S., Munene, J., et al., (2014). Actionand action-regulation in entrepreneurship: Evaluating a student training for promoting entrepreneurship.Academy of Management Learning & Education, in press.

Glaub, M. & Frese, M. (2011). A critical review of the effects of entrepreneurship training in developingcountries. Enterprise Development & Microfinance, 22, 335–353.

Hunter, J.E. & Schmidt, F.L. (2004). Methods of meta-analysis: Correcting error and bias in research findings(2nd ed.). Thousand Oaks, CA: Sage.

Karlan, D. & Appel, J. (2011). More than good intentions: How a new economics is helping to solve globalpoverty. New York City: Dutton, Penguin Group.

Martin, B.C., McNally, J., & Kay, M. (2013). Examining the formation of human capital in entrepreneurship:A meta-analysis of entrepreneurship education outcomes. Journal of Business Venturing, 28, 211–224.

McKenzie, B. & Woodruff, C. (2012). What are we learning from business training and entrepreneurshipevaluations around the developing world? Washington, DC: Worldbank.

Pearce, J.L. & Huang, L. (2012). The decreasing value of our research to management education. Academy ofManagement Learning and Education, 11, 247–262.

Rauch, A. & Frese, M. (2006). Meta-analyses as a tool for developing entrepreneurship research and theory.Advances in Entrepreneurship, Innovation, and Economic Growth, 9, 29–51.

Rauch, A., Wiklund, J., Lumpkin, G.T., & Frese, M. (2009). Entrepreneurial orientation and businessperformance: An assessment of past research and suggestions for the future. Entrepreneurship Theory andPractice, 33(3), 761–787.

Rosenbusch, N., Brinckmann, J., & Mueller, V. (2012). Does acquiring venture capital pay off for the fundedfirms? A meta-analysis on the relationship between venture capital investment and funded firm financialperformance. Journal of Business Venturing, ••, ••–••. conditionally accepted.

Rousseau, D.M. (2012). Envisioning evidence-based management. In D.M. Rousseau (Ed.), The Oxfordhandbook of evidence-based management (pp. 3–24). Oxford, U.K.: Oxford University Press.

Rynes, S.L., Colbert, A.E., & Brown, K.G. (2002). HR professionals’ beliefs about effective human resourcepractices: Correspondence between research and practice. Human resource Management, 41, 149–174.

Sarasvathy, D.K., Simon, H.A., & Lave, L. (1998). Perceiving and managing business risks: Differencesbetween entrepreneurs and bankers. Journal of Economic Behavior & Organization, 33, 207–225.

Stokes, D.E. (1997). Pasteur’s quadrant—Basic science and technological innovation. New York: BrookingsInstitution Press.

Michael Frese is a •• in the Department of Management & Organisation, NUS Business School, Singapore119245, and a •• at the Leuphana, University of Lueneburg, •• 21335, Germany.

Denise M. Rousseau is a •• in the Heinz School of Public Policy and Management and Tepper School ofManagement, Carnegie Mellon University, Pittsburgh, PA 15213, USA.

Johann Wiklund is a •• in the Whitman School of Management, Syracuse University, 720 University Ave,Suite 531, Syracuse, NY 13244, USA.

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Click on the proof at the relevant point and

draw the selected shape with the cursor.

To add a comment to the drawn shape,

move the cursor over the shape until an

arrowhead appears.

Double click on the shape and type any

text in the red box that appears.