Correcting for Endogeneity in Strategic Management Research

Hamilton, Barton H.; Nickerson, Jack A.

doi:10.1177/1476127003001001218

Cited by 1,104 publications

(897 citation statements)

References 25 publications

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“…A failure to statistically correct for this endogeneity may not only lead to biased estimates, but also to faulty conclusions about our key propositions (Hamilton & Nickerson, 2003). If manufacturers who produce PLs self-select themselves and/or are selected by the discounter on the basis of unobservable characteristics that affect both shelf presence and PL production, a problem of selection bias may arise.…”

Section: Modelmentioning

confidence: 99%

Does private-label production by national-brand manufacturers create discounter goodwill?

Braak

Deleersnyder

Geyskens

et al. 2013

International Journal of Research in Marketing

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Discounters have a private-label dominated assortment where national brands have only limited shelf access. These limited spots are in high demand with national-brand manufacturers.We examine whether private-label production by leading national-brand manufacturers for two important discounters (one hard and one soft) creates discounter goodwill. We estimate a selection model on a sample of 450 manufacturer-category combinations from two leading discounters (Aldi in Germany and Mercadona in Spain), and show that private-label production is indeed rewarded: national-brand manufacturers involved in such practice have a higher likelihood of procuring shelf presence for their brands. Moreover, while powerful manufacturers are intrinsically more likely to obtain shelf presence with soft discounters, manufacturers with lower power can compensate this by producing private labels. No such dependence on power exists for the hard discounter.However, not all national-brand manufacturers are equally likely to produce private labels for discounters. We find that national-brand manufacturers are less likely to do so when they experience more sales growth, when it is more difficult to produce high-quality products in the category, when they invest more advertising support into their brands, and when they introduce more innovations. Moreover, a higher price differential relative to the discounter's private labels makes national-brand manufacturers less likely to engage in private-label production for hard discounters.

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Section: Modelmentioning

confidence: 99%

Does private-label production by national-brand manufacturers create discounter goodwill?

Braak

Deleersnyder

Geyskens

et al. 2013

International Journal of Research in Marketing

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“…Thus participation in an IC broadcast search problem solving process does not occur randomly but is instead predicated on endogenous choices made by individual solvers. Therefore, any regression analysis that does not take into account the self-selection decisions of individuals will result in biased coefficient estimates due to omitted variables that affect both the decision to participate and the resulting outcome (Hamilton and Nickerson 2003).…”

Section: Section 5 Estimation Strategymentioning

confidence: 99%

Marginality and Problem-Solving Effectiveness in Broadcast Search

Jeppesen

Lakhani²

2010

Organization Science

964

754

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We examine who the winners are in science problem solving contests characterized by open broadcast of problem information, self-selection of external solvers to discrete problems from the laboratories of large R&D intensive companies and blind review of solution submissions. Analyzing a unique dataset of 166 science challenges involving over 12,000 scientists revealed that technical and social marginality, being a source of different perspectives and heuristics, plays an important role in explaining individual success in problem solving. The provision of a winning solution was positively related to increasing distance between the solver's field of technical expertise and the focal field of the problem. Female solvers -known to be in the "outer circle" of the scientific establishment -performed significantly better than men in developing successful solutions. Our findings contribute to the emerging literature on open and distributed innovation by demonstrating the value of openness, at least narrowly defined by disclosing problems, in removing barriers to entry to non-obvious individuals. We also contribute to the knowledge-based theory of the firm by showing the effectiveness of a market-mechanism to draw out knowledge from diverse external sources to solve internal problems

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“…The relevance of the instrument variables is obtained by the Fstatistic of the instruments which was 12.5. After estimating the first stage probit model with branching as a dependent variable, we generated the Inverse Mills Ratio in STATA 9.0 using the code by Hamilton and Nickerson (2003). In the second-stage model, we introduce the Inverse Mills Ratio in place of the branching variable as an instrumented branching variable.…”

Section: Robustnessmentioning

confidence: 99%

Entry into new niches: the effects of firm age and the expansion of technological capabilities on innovative output and impact

Kotha

Zheng

George

2011

Strategic Management Journal

196

116

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We provide evidence that young firms systematically differ from older firms in their innovative output when they enter 'new to the firm' technological niches. We analyze data from 128 biotechnology firms since their inception and track these firms over time. Our analyses reveal that the organizational age at which the firm branches into new technological niches significantly influences its innovative activity. We refine the focus of the extant literature by separately examining the effects of branching on the quantity of innovative output, and the impact that this output has on the technology domain. Subsequent to branching into new niches, we find that older firms have a higher quantity of output than their younger counterparts; whereas young firms tend to outpace their older rivals with higher impact. The implications of these findings for the literature on dynamic capabilities and entrepreneurship are discussed. Entry into New Niches 3How does the timing of capability development matter? We examine whether the benefits that accrue to expanding technological capabilities are contingent upon firm age. We draw on the organizational aging and dynamic capability literatures to study how the expansion of a firm's capabilities by entering 'new to the firm' technological niches, termed as branching, at different points in the firm's age would vary in its influence on subsequent innovative activity.Though commonly assumed that startups create breakthrough inventions, some contrarian evidence suggests that mature incumbents also generate such discoveries (Dushnitsky and Lenox, 2005;Phene et al., 2006). In a study of large chemical firms, Ahuja and Lampert (2001) proffer evidence to suggest that mature incumbents overcome pathologies of aging by branching into new domains and by recombining new with old knowledge. Other researchers have investigated the temporal and structural effects of recombining new with old knowledge on innovative output (Nerkar, 2003;Rosenkopf and Nerkar, 2001;Rothaermel and Boeker, 2008;Yayavaram and Ahuja, 2008). We contribute to this conversation by examining the role of entry into novel technology areas, i.e. branching, and how the effects of branching on innovative activity vary with firm age.To examine whether the pattern of optimal technological expansion is conditional on firm age, we study innovative output of biotechnology firms from their inception over a twenty year period. This sample allows us to investigate the underlying conditions when firms optimize their output and impact by managing entry into new technological niches. The study engages the literature on capability development, especially in young firms. The entry into new niches corresponds with the expansion of a firm's technological capabilities to drive innovation within and across these technological domains. We also refine the focus of the extant literature by Entry into New Niches 4 separately examining the effects of branching on the quantity of innovative output and the impact that the output has on the technol...

show abstract

Correcting for Endogeneity in Strategic Management Research

Cited by 1,104 publications

References 25 publications

Does private-label production by national-brand manufacturers create discounter goodwill?

Does private-label production by national-brand manufacturers create discounter goodwill?

Marginality and Problem-Solving Effectiveness in Broadcast Search

Entry into new niches: the effects of firm age and the expansion of technological capabilities on innovative output and impact

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