Endogeneity: A Review and Agenda for the Methodology-Practice Divide Affecting Micro and Macro Research

Abstract

An expanding number of methodological resources, reviews, and commentaries both highlight endogeneity as a threat to causal claims in management research and note that practices for addressing endogeneity in empirical work frequently diverge from the recommendations of the methodological literature. We aim to bridge this divergence, helping both macro and micro researchers understand fundamental endogeneity concepts by: (1) defining a typology of four distinct causes of endogeneity, (2) summarizing endogeneity causes and methods used in management research, (3) organizing the expansive methodological literature by matching the various methods to address endogeneity to the appropriate resources, and (4) setting an agenda for future scholarship by recommending practices for researchers and gatekeepers about identifying, discussing, and reporting evidence related to endogeneity. The resulting review builds literacy about endogeneity and ways to address it so that scholars and reviewers can better produce and evaluate research. It also facilitates communication about the topic so that both micro- and macro-oriented researchers can understand, evaluate, and implement methods across disciplines.

Omitted Variable Bias: Examining Management Research With the Impact Threshold of a Confounding Variable (ITCV)

“…The detrimental influence of omitted variables in empirical analyses has been recognized in management research for decades (Bascle, 2008; Hill, Johnson, Greco, O’Boyle, & Walter, 2021; Shaver, 1998). Omitted variables refer to factors that influence the dependent variable of interest but are not included in the analytic model.…”

Corporate social responsibility and stakeholder dialogue under institutional voids: decoupling the role of corporate motives, ethics, and resources

“…These methods did not provide the authors with significant results, as they require clearly identifying the cause of endogeneity and justifying the instrumental variable(s). It is therefore necessary to acknowledge that results and conclusions generalizability is limited as endogeneity concerns are present, even if recent studies (Hill et al, 2021) indicate that potential endogeneity concerns can still make the results suitable to advance the understanding of a topic, if the research setting is peculiar or challenging.…”

“…It is therefore necessary to acknowledge that results and conclusions are contingent on these limitations. However, given that endogeneity concerns are present in virtually all social science research (Hill et al, 2021), the peculiarity of the research setting, and the novelty of the study still make the results suitable to advance understanding of CSR and SD under institutional voids. Future studies using different designs may shed light and potentially address this endogeneity threat if local conditions in Mozambique are adequate.…”

“…Future studies using different designs may shed light and potentially address this endogeneity threat if local conditions in Mozambique are adequate. Given the conditions under which the study has been realized, we consider this potential threat not enough relevant to prevent using data from such a peculiar and interesting context (Hill et al, 2021), as they may advance knowledge in the field and have implications for future research.…”

Moral Relativists Resist Health Mandates (NPIs) during the COVID-19 Pandemic

“…These conclusions should be accepted with caution. We controlled for a number of variables that might be associated with both moral beliefs and compliance, but endogeneity threats cannot be eliminated (Hill, Johnson, Greco, O'Boyle, & Walter, 2020). We studied the responses of people who volunteered, for a small remuneration, and by no means was our sample a representative one.…”