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Comparing the Validity and Robustness of Nonparametric and Parametric Techniques: Influence of Scope on New Venture Economic Performance

The relationships among venture strategy elements and venture performance were analyzed with both nonparametric and parametric. This allowed the assessment of the validity and robustness of the results produced by parametric techniques when the assumptions underlying the theoretical developments of such techniques are violated (Gibbons, 1985; Krauth, 1988). Since the assumptions for nonparametric statistical data analysis techniques were satisfied, while those for parametric techniques were not, the nonparametric results are presented first. Tables 4, 5, and 6 contain the results of the nonparametric and parametric: (1) analysis of variance; (2) multiple comparison; and (3) pairwise comparison procedures respectively. For each variable in each Table, the nonparametric values are those redlined and italicized on the first line of the Table, while the parametric values are shown in regular type on the second line. This study expects to find differences in new venture performance based on the scope which a new venture pursues. In addition, this study expected that broad scope strategies would be the most successful, and that intermediate scope would outperform narrow scope strategies.

12 of the 14 nonparametric results in Tables 4, 5, and 6 strongly support the hypotheses that new ventures differ in performance based on the breadth of scope the new venture pursues.

TABLE 4
Nonparametric and Parametric Analysis of Variance Results for Scope Variable

TABLE 5
Nonparametric and Parametric Multiple Comparison Results for Scope Variable

By contract, 13 of the 14 parametric results in Table's 4, 5, and 6 failed to support any of the three hypotheses that new ventures differ in performance based on the breadth of scope the new venture pursues. Moreover, the one statistically significant finding generated by parametric procedures indicated that new ventures pursuing narrow scope strategies are more successful than those which pursue broad scope strategies. Since this is directly contrary to the nonparametric results, and since the assumptions underlying the nonparametric procedures were satisfied, while those underlying the parametric procedures were violated, it appears that this is a spurious result. This conclusion is valid, but space does not permit an in depth examination of it.

Comparing the Validity and Robustness of Nonparametric and Parametric Techniques: Influence of Strategic Weapons on New Venture Performance

Table 7, 8, and 9 contain the results of the nonparametric and parametric: (1) analysis of variance; (2) multiple comparison; and (3) pairwise comparison procedures respectively for

TABLE 6
Nonparametric and Parametric Pairwise Comparison Results for Scope Variable

testing the influence of strategic weapons on venture performance. This study expected to find: (1) differences in venture performance based on the strategic weapons a venture emphasizes; (2) ventures which emphasize both higher relative quality and lower relative price would achieve superior levels of new venture performance; and (3) venture strategies based on higher relative quality would outperform venture strategies based on lower or comparable relative prices.

TABLE 7
Nonparametric and Parametric Analysis of Variance Results for Strategic Weapons Variable

TABLE 8
Nonparametric and Parametric Multiple Comparison Results for Strategic Weapons Variable

23 of the 26 nonparametric results in Tables 7, 8, and 9 strongly support the hypotheses that new ventures differ in performance based on the strategic weapons the venture emphasizes.
By contrast, 21 of the 26 parametric in Tables 7, 8, and 9 failed to support any of the three hypotheses that new ventures differ in performance based on the strategic weapons the venture emphasizes. In addition, 3 of the 5 statistically significant findings generated by the parametric procedure directly contradicted the nonparametric results. Once again, these appeared to be spurious results, a conclusion that was substantiated with further testing.

TABLE 9
Nonparametric and Parametric Pairwise Comparison Results for Strategic Weapons Variable

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