Causality Redux: The Evolution of Empirical Methods in Accounting Research and the Growth of Quasi-Experiments

132 Pages Posted: 18 Nov 2021 Last revised: 7 Jul 2022

See all articles by Chris Armstrong

Chris Armstrong

Stanford Graduate School of Business

John D. Kepler

Stanford Graduate School of Business

Delphine Samuels

University of Chicago -- Booth School of Business

Daniel J. Taylor

The Wharton School, University of Pennsylvania

Date Written: May 14, 2022

Abstract

This paper reviews the empirical methods used in the accounting literature to draw causal inferences. Recent years have seen a burgeoning growth in the use of methods that seek to exploit as-if random variation in observational settings—i.e., “quasi-experiments.” We provide a synthesis of the major assumptions of these methods, discuss several practical considerations relevant to the application of these methods in the accounting literature, and provide a framework for thinking about whether and when quasi-experimental and non-experimental methods are well-suited for addressing causal questions of interest to accounting researchers. While there is growing interest in addressing causal questions within the literature, we caution against the idea that one should restrict attention to only those causal questions for which there are quasi-experiments. We offer a complementary approach for addressing causal questions that does not rely on the availability of a quasi-experiment, but rather relies on a combination of economic theory, developing and falsifying alternative explanations, triangulating results across multiple settings, measures, and research designs, and caveating results where appropriate.

Suggested Citation

Armstrong, Chris S. and Kepler, John and Samuels, Delphine and Taylor, Daniel, Causality Redux: The Evolution of Empirical Methods in Accounting Research and the Growth of Quasi-Experiments (May 14, 2022). Journal of Accounting & Economics (JAE), Forthcoming, Available at SSRN: https://ssrn.com/abstract=3935088 or http://dx.doi.org/10.2139/ssrn.3935088

Chris S. Armstrong

Stanford Graduate School of Business ( email )

655 Knight Way
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Stanford, CA 94305-5015
United States

HOME PAGE: http://https://www.gsb.stanford.edu/faculty-research/faculty/christopher-s-armstrong

John Kepler

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Delphine Samuels

University of Chicago -- Booth School of Business ( email )

1101 East 58th Street
Chicago, IL 60637-1561
United States

Daniel Taylor (Contact Author)

The Wharton School, University of Pennsylvania ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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