We also used the principal components technique to
create three other composite factor variables, each of
which was used to evaluate our specific hypotheses
on the liability of newness (H3). A general management
factor was derived to test Hypothesis 3a based on
the manager's (a) breadth of knowledge, (b) depth of
knowledge, and (c) control. Breadth was defined as the
level of knowledge across functional areas (e.g., marketing,
finance, operations), while depth was the extent of
knowledge within the functions. The derived factor variable
serves as a proxy for general managerial abilities