THE PERILS OF ENDOGENEITY AND INSTRUMENTAL VARIABLES IN STRATEGY RESEARCH: UNDERSTANDING THROUGH SIMULATIONS

• 成果类型: Article
• 署名作者: Semadeni, Matthew; Withers, Michael C.; Certo, S. Trevis
• 署名单位: Indiana University System; IU Kelley School of Business; Indiana University Bloomington; Texas A&M University System; Texas A&M University College Station; Mays Business School; Arizona State University; Arizona State University-Tempe
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2136
• 发表日期: 2014
• 页码: 1070-1079
• 关键词: Endogeneity; simulations; instrumental variables; ordinary least squares; STRATEGY RESEARCH

摘要

In this paper we use simulations to examine how endogeneity biases the results reported by ordinary least squares (OLS) regression. In addition, we examine how instrumental variable techniques help to alleviate such bias. Our results demonstrate severe bias even at low levels of endogeneity. Our results also illustrate how instrumental variables produce unbiased coefficient estimates, but instrumental variables are associated with extremely low levels of statistical power. Finally, our simulations highlight how stronger instruments improve statistical power and that endogenous instruments can report results that are inferior to those reported by OLS regression. Based on our results, we provide a series of recommendations for scholars dealing with endogeneity. Copyright (C) 2013 John Wiley & Sons, Ltd.