An analysis of start-up founders perceptions based on entropy ratios : evidence from the Greek IT market

Abstract

PURPOSE: The study examines use of Entropy related ratios in Entrepreneurship studies. Entropy ratios, such as Mutual Information (M.I.) and Information Gain (I.G.). More specifically, the study focuses on perceptions of I.T. (Information Technology) Greek Startup founders with the use of Mutual Information and Information Gain ratios.

DESIGN/METHODOLOGY: The study compares and discusses key findings between conclusions drawn from correlation coefficient and entropy ratios, regarding the managerial and entrepreneurial implications, based on the exact same dataset of previous published reserch. Entropy based ratio focus on probability analysis in order to measure dependencies between variables. While the mutual information is a measure of dependence between variables, which expresses the quantity of information obtained on one variable when the value of another variable is known, the information gain ratio measures the reduction of the entropy and therefore the reduction of uncertainty of one variable that derives from information gained regarding the value of another variable.

FINDINGS: The study concludes that Mutual Information and Information Gain ratios offer significant information to entrepreneurial research, identifying non-linear relationships. Correlation Coefficient provides a more limited amount of information.

PRACTICAL IMPLICATIONS: Use of Entropy ratios will offer additional insights to both researchers and managers, by providing evidence of non-linear relationships.

ORIGINALITY/VALUE: The research presented here is part of a larger study and further confirms preliminary findings conducted on a smaller sample.