Panel data or pseudo panels for longitudinal research? Cross-national comparisons using the example of firms' training spend

Abstract

The evolution of firm level practices over time has always been a keen area of interest for management scholars. However, in comparison to other social scientists, particularly economists, the relative dearth of firm level panel data sets has restricted the methodological options for exploring inter-temporal changes. This paper applies a pseudo panel methodology to investigate the evolution of training spend at the firm level over time. The analysis is framed within a varieties of capitalism lens and by adopting a more meaningful approach to examining changes over time it leads us to question some of the “truisms” linked to firms expected behaviours within different national institutional frameworks. As with any large-scale quantitative analysis, it would always benefits from a larger number of observations and/or a longer time period, in this instance access to annual data rather than 4 or 5 year intervals would have been helpful. By adopting a different, and more appropriate, approach to analysing existing cross-sectional data over time this empirical research helps to achieve a deeper understanding of the complex issues that influence decision making at the firm level. At the firm level, in line with the practical implications above, this will enable decision makers to achieve a deeper understanding of the evolution of the external context in which they operate and the likely influence of that evolution within their own organisation. This approach enables a more meaningful exploration of inter-temporal changes in situations where longitudinal data does not exist.