Applying random coefficient models to strategy research
Subtitle: testing for firm heterogeneity, predicting firm-specific coefficients, and estimating strategy trade-offs
By: Juan Alcácer, Wilbur Chung, Ashton Hawk, Gonçalo Pacheco-de-Almeida
Contributors: Chung, Wilbur; Hawk, Ashton; Pacheco de Almeida, Goncalo; Harvard Business School
Series: Working paper / Harvard Business School -- 14-022; Working paper (Harvard Business School) -- 14-022
Publisher: Harvard Business School
Published: 2013
Place of publication: Boston]
Language: eng
Number of pages: 48
Description: Although Strategy research aims to understand how firm actions have differential effects on performance, most empirical research estimates the average effects of these actions across firms. This paper promotes Random Coefficients Models (RCMs) as an ideal empirical methodology to study firm heterogeneity in Strategy research. Specifically, we highlight and illustrate three main benefits that RCMs offer to Strategy researchers--testing firm heterogeneity, predicting firm-specific effects, and estimating trade-offs in strategy--using both synthetic and actual datasets. These examples showcase the potential uses of RCMs to test and build theory in Strategy, as well as to perform exploratory and definitive analyses of firm heterogeneity.
Notes: "September 2013."--Publisher's Web site.

Includes bibliographical references (pages 39-40).