Restricted Variance Interactions in Entrepreneurship Research: A Unique Basis for Context-as-Moderator Hypotheses

Jose M. Cortina*, Tine Köhler, Zitong Sheng, Kathleen R. Keeler, Bo Bernhard Nielsen, Joseph E. Coombs, David J. Ketchen, Jr

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review


In this methodological brief, we demonstrate the usefulness of the restricted variance (RV) interaction to entrepreneurship research. RV reasoning can help scholars to specify precise roles for contextual moderators. This specificity allows for strengthening of arguments and for testing of one of the reasons for an interaction. In some cases, it points to otherwise unexpected interaction patterns. We illustrate the power of RV reasoning with a data set of 503 biotech firms to show how RV explains geographic differences in the relationship between number of alliances and initial public offering value. Finally, we show how these interactions can be tested given typical distributions.
Original languageEnglish
JournalEntrepreneurship: Theory and Practice
Issue number5
Pages (from-to)1995-2016
Number of pages22
Publication statusPublished - Sept 2023
Externally publishedYes

Bibliographical note

Published online: 27 October 2022.


  • Interactions
  • Moderation
  • Context
  • Restriced variance

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