Advanced Search
MyIDEAS: Login to save this paper or follow this series

The use of limited dependent variable techniques in strategy research: assessment and critique


Author Info

  • Wiersema, M.
  • Bowen, H.P.

    (Vlerick Leuven Gent Management School)


Strategy researchers are increasingly turning their attention from examining the implications of strategic choices on firm performance to examining the factors that determine strategic choice at the firm level. This shift of research orientation has meant that researchers are increasingly faced with a limited dependent variable (LDV) that takes a limited number of usually discrete values. In such cases researchers typically use discrete LDV methods such as Logit or Probit and, in fact, the use of such methods has increased significantly in recent years. Despite their growing popularity, there appear to be widespread problems in the application, reporting, and interpretation of LDV methods and their results within the literature. We examined the use of LDV methods in 50 papers published since 2002 in two top-tier journals that are primary outlets for empirical strategy research (Strategic Management Journal and Academy of Management Journal). One particularly troublesome issue is the finding that researchers fail to correctly analyze moderating hypotheses, a situation that likely stems from a lack of familiarity with the nonlinear nature of LDV models. Based on our review of the literature, this paper provides an assessment of the use of the most common LDV methods, highlights problems and inconsistencies regarding their use and interpretation, and provides guidelines and suggestions for researchers seeking to use LDV statistical techniques.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Our checks indicate that this address may not be valid because: 404 Not Found ( [301 Moved Permanently]--> If this is indeed the case, please notify (Isabelle Vandenbroere)
Download Restriction: no

Bibliographic Info

Paper provided by Vlerick Leuven Gent Management School in its series Vlerick Leuven Gent Management School Working Paper Series with number 2006-33.

as in new window
Length: 22 pages
Date of creation: 04 Oct 2006
Date of revision:
Handle: RePEc:vlg:vlgwps:2006-33

Contact details of provider:
Postal: Reep 1, 9000 Gent
Phone: +32 9 210 98 99
Fax: +32 9 210 97 00
Web page:
More information through EDIRC

Related research

Keywords: empirical methods; limited dependent variable; strategy research;

This paper has been announced in the following NEP Reports:


No references listed on IDEAS
You can help add them by filling out this form.


Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Chiara Franco & Alberto Marzucchi & Sandro Montresor, 2012. "Absorptive capacity, innovation cooperation and human-capital. Evidence from 3 European countries," JRC-IPTS Working Papers on Corporate R&D and Innovation 2012-05, Institute of Prospective Technological Studies, Joint Research Centre.
  2. Hagedoorn, John & Wang, Ning, 2010. "Is there complementarity or substitutability between internal and external R&D strategies?," MERIT Working Papers 005, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. Harry P. Bowen, 2009. "Testing for Moderating Effects in Limited Dependent Variable Models : Structural versus Secondary Interactions," Discussion Paper Series 2009-01, McColl School of Business, Queens University of Charlotte, revised Oct 2009.
  4. Aschhoff, Birgit & Grimpe, Christoph, 2012. "Peer effects and academics' industry involvement: The moderating role of age on professional imprinting," ZEW Discussion Papers 12-011, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. Stefan Hilger & Ansgar Richter & Utz Schaeffer, 2013. "Hanging Together, Together Hung? Career Implications of Interpersonal Ties Between CEOs and Top Managers," BuR - Business Research, German Academic Association for Business Research, vol. 6(1), pages 8-32, May.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:vlg:vlgwps:2006-33. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Isabelle Vandenbroere).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.