The Antecedents and Performance Implications of Cooperative Exchange Norms
Organization Science
The Antecedents and Performance Implications of Cooperative Exchange Norms
Organization Science
An Empirical Analysis of Contract Structures in IT Outsourcing
Information Systems Research
Does RFID improve firms' financial performance? an empirical analysis
Information Technology and Management
Journal of Management Information Systems
Knowledge based transactions and decision framing in Information Technology Outsourcing
The Journal of Strategic Information Systems
| Hi-index | 0.01 |
Firms choose strategies based on their attributes and industry conditions; therefore, strategy choice is endogenous and self-selected. Empirical models that do not account for this and regress performance measures on strategy choice variables are potentially misspecified and their conclusions incorrect. I highlight how self-selection on hard-to-measure or unobservable characteristics can bias strategy performance estimates and recommend an econometric technique that has been developed to account for this effect. Although this concern applies to a wide range of strategy questions, to demonstrate its effect I empirically examine if entry mode choice (acquisition versus greenfield) influences foreign direct investment survival. In specifications that do not account for self-selection, I find that greenfield entries have survival advantages compared to acquisitions. This confirms previous findings. However, the significance of this effect disappears once I account for self-selection of entry mode in the empirical estimates. The results confirm that estimates from models that do not account for self-selection of strategy choice can lead to incorrect or misleading conclusions.