Don’t “Waste” Your Time! The Effects of Time Series Errors in Management Research: The Case of Ownership Concentration and Research and Development Spending

Abstract

The potential effects of “time series errors” in longitudinal analysis are examined empirically. Using a common hypothesis (the relationship between ownership concentration and research and development (R&D) spending) and a panel of 183 Fortune 500 firms (I 985-l 988) several time series errors are calculated. These analyses are then contrasted with the results of a procedure protected from time series errors. Comparisons show that (I) results may depend upon how researchers define and measure longitudinal effects; (2) time series errors can have significant effects on empirical findings; and (3) the linkage between ownership concentration and R&D may not be as clear-cut as previous studies have suggested. Recommendations for how researchers should account, save, and tell their time are offered.

Get full access to this article

View all access options for this article.

References

Baysinger, B. D. & Hoskisson, R. E. (1990). The composition of boards of directors and strategic control: Effects on corporate strategy. Academy of Management Review, 15: 72-88.

Baysinger, B. D. & Hoskisson, R. E. (1989). Diversification strategy and R&D intensity in multiproduct firms. Academy of Management Journal, 32: 310-332.

Baysinger, B. D. , Kosnik, R. D. , & Turk, T. A. (1991). Effects of board and ownership structure on corporate R&D strategy. Academy of Management Journal, 34: 205-214.

Bergh, D. D. (1993). Watch the time carefully: The use and misuse of time effects in management research. Journal of Management, 19: 683-705.

Bethel, J. E. & Liebeskind, J. (1993). The effects of ownership structure on corporate restructuring. Strategic Management Journal, 14(Special Issue): 15-32.

Boyd, B. (1990). Corporate linkages and organizational environment: A test of the resource dependence model. Strategic Management Journal, 11: 419-430.

Chaganti, R. & Damanpour, E (1991). Institutional ownership, capital structure, and firm performance. Strategic Management Journal, 12: 479-491.

Dess, G. G. & Beard, D. W. (1984). Dimensions of organizational task environments. Administrative Science Quarterly, 29: 52-73.

Girden, E. R. (1992). ANOVA: Repeated measures. Sage University paper series on quantitative applications in the social sciences, 07-084. Newbury Park, CA: Sage.

10.

Gomez-Mejia, L. R. & Balkin, D. B. (1992). Determinants of faculty pay: An agency theory perspective. Academy of Management Journal, 35: 921-955.

11.

Gomez-Mejia, L. R. , Tosi, H. , & Hi&in, T. (1987). Managerial control, performance, and executive compensation. Academy of Management Journal, 30: 417-428.

12.

Graves, S. B. (1988). Institutional ownership and corporate R&D in the computer industry. Academy of Management Journal, 31: 417-428.

13.

Hansen, G. S. & Hill, C. W. L. (1991). Are institutional investors myopic? A time-series study of four technology-driven industries. Strategic Management Journal, 22: 1-16.

14.

Hill, C. W. L. & Snell, S. A. (1989). Effects of ownership structure and control on corporate productivity. Academy of Management Journal, 32: 25-46.

15.

Hoskisson, R. E. & Johnson, R. A. (1992). Corporate restructuring and strategic change: The effect of diversification strategy and R&D intensity. Strategic Management Journal, 13: 625-634.

16.

Jarrell, G. A. & Lehn, K. (1985). Institutional ownership. tender offers, and long-term investments. Washington, DC: Office of Chief Economist, Securities and Exchange Commission.

17.

Kennedy, P. (1992). A guide to econometrics. Cambridge: MIT Press.

18.

Kimberly, J. R. (1976). Issues in the design of longitudinal organizational research. Sociological Method and Research, 4: 321-347.

19.

LaTour, S. & Miniard, P. (1983). The use and misuses of repeated measures designs in marketing research. Journal of Marketing Research, 16: 430-449.

20.

Menard, S. (1991). Longitudinal research. Sage University Paper series on quantitative application in the social sciences, series no. 07-076. Newbury Park, CA: Sage.

21.

Podsakoff, I? M. & Dalton, D. R. (1987). Research methodology in organizational studies. Journal of Management, 13: 419-441.

22.

Vogt, W. P (1993). Dictionary of statistics and methodology: A nontechnical guide for the social sciences. Newbury Park, CA: Sage.

23.

Yasai-Ardekani, M. (1989). Effects of environmental scarcity and munificence on the relationship of context to organizational structure. Academy of Management Journal, 32: 131-156.