Using Outliers for Theory Building

Abstract

Outliers are promising candidates for theory building because they defy expected cause-and-effect relationships. Nonetheless, researchers often treat them as a nuisance and exclude them from further study. In fact, our analysis founds only two article using outliers for theory development in all quantitative articles published from 1993 to 2012 in six major management journals, and less than 5% cared to even mention them (relaying reasons for deleting them, mostly). To rectify this, we provide a roadmap for empirical researchers interested in theory building.