Compositional Models and Organizational Research: Application of a Mixture Model to Non-experimental Data in the Context of CEO Pay

Organizational Research Methods, Volume: 20, Issue: 1, Page Number(s): 95-120

University of Cincinnati Lindner College of Business Research Paper

Posted: 6 Nov 2017

Date Written: October 1, 2016

Abstract

An emergent stream of research in management employs configurational and holistic approaches to understanding macro and micro phenomena. In this study, we introduce mixture models—a related class of models—to organizational research and show how they can be applied to non-experimental data. Specifically, we reexamine the long-standing research question concerning the CEO pay–firm performance relationship using a novel empirical approach, treating individual pay elements as components of a mixture, and demonstrate its utility for other research questions involving mixtures or proportions. Through this, we provide a step-by-step guide for other researchers interested in compositional modeling. Our results highlight that a more nuanced approach to understanding the influence of executive compensation on firm performance brings new insights to this research stream, showcasing the potential of compositional models for other literatures.

Suggested Citation

Campbell, Joanna Tochman, Compositional Models and Organizational Research: Application of a Mixture Model to Non-experimental Data in the Context of CEO Pay (October 1, 2016). Organizational Research Methods, Volume: 20, Issue: 1, Page Number(s): 95-120 ; University of Cincinnati Lindner College of Business Research Paper . Available at SSRN: https://ssrn.com/abstract=3063563

Joanna Tochman Campbell (Contact Author)

University of Cincinnati

Cincinnati, OH 45221-0389
United States

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