Methodological Advances in Strategic Management Research

Despite the increased attention that has been directed at methodological issues in business strategy during the past 15 years, a number of challenges still exist. One challenge is how to correctly test for mediated effects, given that many of the models in the strategy area violate assumptions regarding the independence of error terms in regression equations. Violating these assumptions leads to biased parameter estimates, and impedes the ability of researchers to make correct inferences about the mechanisms that explain substantive relationships. Another related challenge is the issue of endogeneity. Endogeneity occurs when an independent variable is correlated with the error term in an OLS regression model. Although this issue has been a topic of discussion for a number of decades in other fields, it has only recently begun to attract attention among strategy researchers. A third challenge relates to the appropriate way to test non-linear relationships using polynomial variables. Despite the fact that strategy researchers frequently examine curvilinear relationships in their studies, they often do not perform transformations of their polynomial terms prior to conducting their statistical analyses. This is a problem because the multicollinearity between the lower-order (linear) and higher-order (polynomial) terms increases the likelihood of biased estimates and Type II errors. The three presentations included in this symposium address these issues by reviewing previous research, conducting and analyzing Monte Carlo simulations, and providing guidelines that strategic management scholars can put into practice when conducting their own research.Testing For Mediating Effects in Strategy ResearchPresenter: Jed DeVaro; California State U. East BayRemedying Endogeneity: Are the Cures Worse than the Disease?Presenter: Matthew Semadeni; Indiana U. Kelley SchoolPresenter: S Trevis Certo; Arizona State U.Presenter: Michael C. Withers; Texas A&M U.A Review and Recommendations For Polynomial Transformations in Strategy ResearchPresenter: Valentina V. Kuskova; National Research U.Presenter: Nathan Philip Podsakoff; U. of ArizonaPresenter: Philip M. Podsakoff; Indiana U.