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Cited by 1,309Advanced Causal Inference TechniquesSpatial and Panel Data AnalysisAccounting and Organizational Management

Correcting for Endogeneity in Strategic Management Research

Open access
Hamilton, Barton H., Nickerson, Jackson A.·2003·Strategic Organization
DOI 10.1177/1476127003001001218
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Abstract

The field of strategic management is predicated fundamentally on the idea that managements' decisions are endogenous to their expected performance implications. Yet, based on a review of more than a decade of empirical research in the Strategic Management Journal, we find that few papers econometrically correct for such endogeneity. In response, we now describe the endogeneity problem for cross-sectional and panel data, referring specifically to management's choice among discrete strategies with continuous performance outcomes. We then present readily implementable econometric methods to correct for endogeneity and, when feasible, provide STATA code to ease implementation. We also discuss extensions and nuances of these models that are sometimes difficult to decipher in more standard treatments. These extensions are not typically discussed in the strategy literature, but they are, in fact, highly pertinent to empirical strategic management research.

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  • Self-selection could bias results if factors that predict the likelihood of becoming certified also influence the likelihood of publicizing the certification.

    “Such selection could nevertheless bias our results if factors that predict the likelihood of becoming certified also influence the likelihood of publicizing the certification (Hamilton and Nickerson, 2003;Bascle, 2008).”

    From Strategic Silence: Withholding Certification Status as a Hypocrisy Avoidance Tactic (2018) · cites this paper as Hamilton and Nickerson, 2003

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Research works printed but not linked: 19

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  2. Chib, S. and Hamilton, B. H. (2001) 'Semiparametric Bayes Analysis of Longitudinal Data Treatment Models',Journal of Econometrics 110: 67–89.
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  8. Lee, L. F. (1982) 'Some Approaches to the Correction of Selectivity Bias', Review of Economic Studies 49: 355-72.
  9. Maddala, G. S. (1983) Limited-Dependent and Qualitative Variables in Econometrics. Cambridge: Cambridge University Press.
  10. Masten, S. E. (1996) 'Empirical Research and Transaction Cost Economics: Challenges, Progress, Directions', in J. Grownewegen (ed.) Transaction Cost Economics and Beyond, pp. 43–64. Boston, MA: Kluwer.
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  14. Shaver, J. M. (1998) 'Accounting for Endogeneity when Assessing Strategy Performance: Does Entry Mode Choice Affect FDI Survival?', Management Science 44(4): 571–85.
  15. Vella, F. (1998) 'Estimating Models with Sample Selection Bias: A Survey', Journal of Human Resources XXXIII: 127-69.
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  17. Willis, R. and Rosen, S. (1979) 'Education and Self-Selection', Journal of Political Economy 87 (Supplement): S7-S36.
  18. Wooldridge, J. (1995) 'Selection Corrections for Panel Data Models Under Conditional Mean Independence Assumptions', Journal of Econometrics 68: 115–32.
  19. Wooldridge, J. (2002) Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: MIT Press.

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Authors
Hamilton, B. H., & Nickerson, J. A.
Affiliations
Washington University in St. Louis (US)
ORCID
Nickerson, Jackson A.
Venue
Strategic Organization
Publisher
SAGE Publications
Published
2003-02
Volume
1
Issue
1
Pages
51-78
ISSN
  • 1476-1270 (ISSN-L)
  • 1741-315X
DOI
10.1177/1476127003001001218
OpenAlex
W2114734276
Cited by
1,309
References
3
Citations by year
2026: 46 · 2025: 63 · 2024: 57 · 2023: 68 · 2022: 73 · 2021: 84 · 2020: 82 · 2019: 75 · 2018: 78 · 2017: 79 · 2016: 71 · 2015: 68 · 2014: 69 · 2013: 71 · 2012: 66
FWCI
15.79
Type
journal article
Language
en
Open access
Licence
journals.sagepub.com/page/policies/text-and-data-mining-license (tdm)
Locations
Strategic Organization (publishedVersion)
Topics
  • Physical Sciences › Mathematics › Statistics and Probability › Advanced Causal Inference Techniques
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Spatial and Panel Data Analysis
  • Social Sciences › Business, Management and Accounting › Management Information Systems › Accounting and Organizational Management
Keywords
endogeneity, strategic management research, management decision-making, cross-sectional data, panel data, Stata code

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