LONGITUDINAL ANALYSIS IN STRATEGIC MANAGEMENT

Abstract

Longitudinal regression analysis is conducted to clarify causal relations and control for unwanted influences from actor heterogeneity and state dependence on theoretically important coefficient estimates. Because strategic management contains theory on how firms differ and how firm actions are influenced by their current strategic position and recent experiences, consistency of theory and methodology often requires use of longitudinal methods. We describe the theoretical motivation for longitudinal methods and outline some common methods. Based on a survey of recent articles in strategic management, we argue that longitudinal methods are now used more frequently than before, but the use is still inconsistent and insufficiently justified by theoretical or empirical considerations. In particular, strategic management researchers should use dynamic models more often, and should test for the presence of actor effects, autocorrelation, and heteroscedasticity before applying corrections.