CAN SIGNAL DETECTION THEORY BE USEFUL IN THE STUDY OF ENTREPRENEURSHIP?

The study of entrepreneurship in the twentieth century can be characterized as the import era: psychological trait theories (Brockhaus & Horowitz, 1986; McClelland, 1965; Powell & Bimmerle, 1980); psychological cognition theories (Busenitz, 1999; Katz, 1992); strategy theories (McDougall & Robinson, 1990; Sandberg, 1992); finance theories (Brophy & Shulman, 1992; McMahon & Stanger, 1995); marketing theories (Hills, 1981); population ecology theories (Aldrich, 1990); sociological network theories (Aldrich & Zimmer, 1986; Birley, 1985) and creativity theories (Long & McMullen, 1984) among others were imported to shape the development of entrepreneurship as an academic discipline. Thus far, the results of this prodigious effort are ambiguous at best; findings warrant continued effort in each stream but have to produce consequential insights into the nature, process, and dynamics of entrepreneurship. Why this may be so will be considered later. However, such a track record should prompt considerable reluctance to heed McMullen and Shepherd’s (2003) suggestion to import yet another theory – signal detection – rather than approach the study of entrepreneurship directly. Based on their exposition, such reluctance would be well founded except for the rather exciting fact that the framework has the potential for consequential insights if applied in another way. The purpose of this commentary is to critically evaluate the authors’ conceptualization and outline the alternative.