Stylized facts, empirical research and theory development in management

Abstract

Stylized facts matter enormously in management inquiry because such inquiry ultimately deals with the real world. But management research places much less emphasis on empirical regularities than we should expect, and that is required, for scholarship that ultimately concerns itself with the real world. Imagine grounding the study of real organizations only in theory; we ought to be laughed out of the academy for that. Yet our journals appear to insist on theory testing. In a field that seeks to understand the real world, it makes little sense to always put theory before facts. We must understand at least the broad outlines of ‘what’ a phenomenon consists of before we try to explain ‘why’ it occurs. That is, we need research directed toward uncovering empirical regularities, otherwise known as ‘stylized facts’. Only then are we in a position to build theory that in turn can serve as the basis for more refined tests and extensions.