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Do Continuous and Categorical Measures Capture the Same Construct of Diversity? Evidence from China |
Liangding Jia1(), Guoguang Wan2(), Jieyu Zhou3(), Qian Lu4() |
1. School of Business, Nanjing University, Nanjing 210093, China; 2. Business School, Hong Kong University of Science and Technology, Hong Kong, China; 3. School of Business, Nanjing University, Nanjing 210093, China; 4. Business School, National University of Singapore, Singapore 119077, Singapore |
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Abstract Chinese researchers have long preferred substantive research (i.e., examination of relationships among variables) to construct validation research, while failing to realize that construct validation research is the foundation of substantive research. This paper endeavors to answer a question: Do Rumelt’s (1974) categorical and Standard Industrial Classification (SIC) and skill-based continuous measures capture the same construct of diversity in the context of China? We take two steps to investigate the question. First, are continuous measures (SIC & skill-based entropy and Montgomery product count) appropriately differentiated among Rumelt’s categories? Second, are the categories converted from SIC & Skill-based measures convergent to Rumelt’s categorical measures? Results show that the two measures are consistent with each other.
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Keywords
diversification
continuous measures
categorical measures
Standard Industrial Classification
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Corresponding Author(s):
Liangding Jia,Email:jldyxlzs@nju.edu.cn; Guoguang Wan,Email:zjgt2000@gmail.com; Jieyu Zhou,Email:juliezhou416@gmail.com; Qian Lu,Email:lqian119@gmail.com
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Issue Date: 05 September 2010
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