Statistical and Methodological Myths and Urban Legends in Strategic Management Research: The Case of Moderation Analysis

Abstract

This paper examines whether methodological precedence in applying moderation analysis to strategic management research relies on myths and urban legends, and if doing so affected empirical conclusions, implications for theory development, and practical recommendations. An in-depth analysis of 69 studies published in the Strategic Management Journal between 2000 and 2014 using moderation analysis finds that strategic management scholars typically rely on statistical myths and urban legends when applying moderation analysis including: (1) interpreting main effects separately from their significant interaction with other variables; (2) failing to report reliability values of interaction terms; and (3) relying on hierarchical approaches that can lead to interpretation errors. Further examples illustrate how these practices could lead researchers to draw incomplete and possibly inaccurate conclusions. Overall, problematic precedents have become the gold standards for testing and interpreting moderation models. Best practice recommendations for redirecting future research to more solid methodological grounding are provided.