Evaluation of Logistic Regression and Multivariate Adaptive Regression Spline Models for the Analysis of Factors Determining Entrepreneurial Success

Abstract

The present research work aims at evaluating Logistic Regression (LR) and Multivariate Adaptive Regression Spline (MARS) models through comparing the results of analysis of factors contributing to entrepreneurial success in Madurai District. The study considered two financial indicators namely Profit Rate and Reinvestment Rate for defining success in entrepreneurial venture. It analysed five factors influencing entrepreneurial success among micro and small scale manufacturing enterprises in the district. Previous business experience was the most important factor contributing to entrepreneurial success, followed by Entrepreneur’s Training and Entrepreneurial orientation. Using Number of significant factors, Accuracy, Sensitivity and Specificity, the results of LR and MR models have been compared. The study validates that MARS model is more powerful and reliable than LR model in predicting the possibility of entrepreneurial success in the business venture.