Measuring performance in entrepreneurship research

Accurate performance measurement is critical to understanding new venture and small business success and failure. The first phase of this study surveys the entrepreneurship literature from 1987-1993 and evaluates the dimensions and measures of performance wed. Little consistency in performance measurement across studies was found; rather, a wide diversity of measures are relied upon. Moreover, 60% of the studies wed only one or two dimensions of performance, generally without justification for selection. The second phase examines relationships between performance variables and illustrates the extent to which dimensions of performance exist. We argue that research in the entrepreneurial context could benefit by: (1) explicitly stating the specific performance dimension(s) under investigation, (2) providing a theory-based rationale for examining the given dimension(s), (3) including multiple dimensions of performance where possible, and (4) including consideration of several critical control variables such as industry, age, and size of the firm.