How Scaling Variables by Firm Size Limits Knowledge Accumulation in Strategic Management

Researchers in multiple disciplines have highlighted the problems that may result from using ratios in analytical models. In this study, we examine how ratios involving measures of firm size impact knowledge accumulation in strategic management. To examine this issue, we introduce an innovative technique whereby we run simulations based on real data involving R&D expenditures, debt, cash, and net income. We use simulation techniques to explore...