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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.

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.

Suggested Citation

  • Coenders, Germà & Bisbe, Josep & Saris, Willem E. & Batista-Foguet, Joan M., 2003. "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," Working Papers of the Department of Economics, University of Girona 7, Department of Economics, University of Girona.
    • Handle: RePEc:udg:wpeudg:007
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    Cited by:

    1. MF. Arrozi Adhikara & Maslichah & Nur Diana & M. Basjir, 2022. "Organizational Performance in Environmental Uncertainty on the Indonesian Healthcare Industry: A Path Analysis," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 11, March.
    2. Mònica González & Germà Coenders & Ferran Casas, 2008. "Using Non-linear Models for a Complexity Approach to Psychological Well-being," Quality & Quantity: International Journal of Methodology, Springer, vol. 42(1), pages 1-21, February.
    3. Mònica González & Ferran Casas & Germà Coenders, 2007. "A Complexity Approach to Psychological Well-Being in Adolescence: Major Strengths and Methodological Issues," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 80(2), pages 267-295, January.

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    More about this item

    Keywords

    measurement error; interaction effects; disattenuation; small samples; moderated regression; reliability; Chronbach’s alpha;
    All these keywords.

    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; Personnel Economics - - Accounting - - - Accounting
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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