Overstating and Understating Interaction Results in International Business Research

Journal of World Business, Forthcoming

24 Pages Posted: 9 Jan 2017

See all articles by Allison Kingsley

Allison Kingsley

University of Vermont - Grossman School of Business

Tom G. Noordewier

University of Vermont - School of Business Administration

Richard Vanden Bergh

University of Vermont - School of Business Administration

Date Written: December 2016

Abstract

Approximately one-third of international business (IB) articles include conditional hypotheses, yet the vast majority risk errors in testing or interpreting the results. Scholars typically restrict their empirical analysis to the coefficient of the interaction term in the regression, exposing themselves to the hazard of overstating or understating results. To mitigate the risk of misstating, we advocate that IB scholars also evaluate the statistical significance of the marginal effect of the primary independent variable over the range of values of the moderating variable. We demonstrate that overstating results can occur when the interaction term coefficient is statistically significant but the marginal effect is not significantly different from zero for some value(s) of the moderating variable. Understating can occur when the interaction term coefficient is not statistically significant, but the marginal effect is statistically different from zero for some value(s) of the moderating variable. In this article, we describe, using simulated data, these two possibilities associated with testing conditional hypotheses, and offer practical guidance for IB scholars.

Keywords: research methods, interactions, conditional hypotheses, moderating variables, marginal effect, regression

JEL Classification: C01, C18

Suggested Citation

Kingsley, Allison and Noordewier, Tom G. and Vanden Bergh, Richard, Overstating and Understating Interaction Results in International Business Research (December 2016). Journal of World Business, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2894484

Allison Kingsley (Contact Author)

University of Vermont - Grossman School of Business ( email )

302 Kalkin Hall
Burlington, VT 05405-0158
United States
8026563464 (Phone)

HOME PAGE: http://allisonkingsley.com

Tom G. Noordewier

University of Vermont - School of Business Administration ( email )

212 Kalkin Hall
Burlington, VT 05405
United States

Richard Vanden Bergh

University of Vermont - School of Business Administration ( email )

Burlington, VT 05405
United States
8026568720 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
50
Abstract Views
215
PlumX Metrics