Moderating Effects of Management Control Systems and Innovation on Performance. Simple Methods for Correcting the Effects of Measurement Error for Interaction Effects in Small Samples

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Moderating Effects of Management Control Systems and Innovation on Performance. Simple Methods for Correcting the Effects of Measurement Error for Interaction Effects in Small Samples

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Coenders, Germà ()
Bisbe, Josep
Saris, Willem E.
Batista-Foguet, Joan M.

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Germà Coenders

Abstract

In the accounting literature, interaction or moderating effects are usually assessed by means of OLS regression and summated rating scales are constructed to reduce measurement error bias. Structural equation models and two-stage least squares regression could be used to completely eliminate this bias, but large samples are needed. Partial Least Squares are appropriate for small samples but do not correct measurement error bias. In this article, disattenuated regression is discussed as a small sample alternative and is illustrated on data of Bisbe and Otley (in press) that examine the interaction effect of innovation and style of use of budgets on performance. Sizeable differences emerge between OLS and disattenuated regression.

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Paper provided by Department of Economics, University of Girona in its series Working Papers of the Department of Economics, University of Girona with number 7.

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Date of creation: Jun 2003
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Handle: RePEc:udg:wpeudg:007

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Find related papers by JEL classification:
C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives

This paper has been announced in the following NEP Reports:

NEP-ECM-2003-07-12 (Econometrics)

References listed on IDEAS
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