Where Do Theories Come From? An Inference-to-the-Best- Explanation Theory of Theory Building (IBET)

This paper presents a theory of theory building and testing called IBET that is based primarily on Lipton's 2004 book "Inference to the Best Explanation". First, IBET argues that theories are ideas invented (not discovered) by people to explain how some part of the world works. Second, IBET argues that the goal in theory building is to abduce from the available evidence (including data, the literature, and the theory builder's personal beliefs) an explanation that provides the researcher with their best understanding of why the phenomena of interest occur. Finally, IBET distinguishes between abductive testing of theories, where the information used for theory building is used for testing, and independent-data testing, where independently collected data are used for assessing the validity of a theory. In the last quarter of the paper, IBET is compared to three rival theories of theory building: (a) Grounded Theory, (b) Eisenhardt's theory building from case studies, and (c) Shepherd and Suddaby's recent advice on theory building. The conclusion is that IBET seems to provide a more in-depth, broad-scope, explanation of theory building than these rival theories.