Ex Ante Predictability of Rapid Growth: A Design Science Approach

IF 7.8 1区管理学 Q1 BUSINESS

Entrepreneurship Theory and Practice Pub Date : 2022-11-06 DOI:10.1177/10422587221128268

Ari Hyytinen, Petri Rouvinen, Mika Pajarinen, Joosua Virtanen

引用次数: 2

Abstract

We examine how machine learning (ML) predictions of high-growth enterprises (HGEs) help a budget-constrained venture capitalist source investments for a fixed size portfolio. Applying a design science approach, we predict HGEs 3 years ahead and focus on decision (not statistical) errors, using an accuracy measure relevant to the decision-making context. We find that when the ML procedure adheres to the budget constraint and maximizes the accuracy measure, nearly 40% of the HGE predictions are correct. Moreover, ML performs particularly well where it matters in practice—in the upper tail of the distribution of the predicted HGE probabilities. JEL Classification: C53, D22, L25

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快速增长的事前可预测性:一种设计科学方法

我们研究了高增长企业(HGEs)的机器学习(ML)预测如何帮助预算有限的风险资本家为固定规模的投资组合寻找投资来源。运用设计科学的方法，我们预测未来3年的HGEs，并使用与决策环境相关的精度测量来关注决策(非统计)错误。我们发现，当机器学习过程遵守预算约束并最大化准确性度量时，近40%的HGE预测是正确的。此外，ML在实践中表现得特别好——在预测的HGE概率分布的上尾。JEL分类:C53, D22, L25

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来源期刊

Entrepreneurship Theory and Practice BUSINESS-

CiteScore

19.00

自引率

12.40%

发文量

期刊介绍： Entrepreneurship Theory and Practice (ETP) is an interdisciplinary scholarly journal dedicated to conceptual and empirical research that advances, tests, or extends theory relating to entrepreneurship in its broadest sense. Article Topics: Topics covered in ETP include, but are not limited to: New Venture Creation, Development, Growth, and Performance Characteristics, Behaviors, and Types of Entrepreneurs Small Business Management Family-Owned Businesses Corporate, Social, and Sustainable Entrepreneurship National and International Studies of Enterprise Creation Research Methods in Entrepreneurship Venture Financing Content: The journal publishes articles that explore these topics through rigorous theoretical development, empirical analysis, and methodological innovation. ETP serves as a platform for advancing our understanding of entrepreneurship and its implications for individuals, organizations, and society.