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Testing for complementarities between accounting practices

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  • Masschelein, Stijn
  • Moers, Frank

Abstract

Following the theoretical innovations of complementarity theory, management control studies have investigated interdependencies between different management control practices. In this paper, we compare the two dominant statistical specifications to test for the presence of an interdependency. We show theoretically how the power of the demand and the performance specification varies with the level of optimality in the sample and how those specifications are vulnerable to correlated omitted variable bias. Our simulation results reveal that the demand specification is more robust to variations in optimality and correlated omitted variables than the performance specification. We use these results to formulate recommendations for future research into management control interdependencies.

Suggested Citation

  • Masschelein, Stijn & Moers, Frank, 2020. "Testing for complementarities between accounting practices," Accounting, Organizations and Society, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:aosoci:v:86:y:2020:i:c:s036136821830165x
    DOI: 10.1016/j.aos.2020.101127
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    Cited by:

    1. Marta Pérez Sigüenza & Laura Rodríguez-León Rodríguez & Juan Manuel Ramon Jeronimo & Raquel Flórez López, 2022. "Management Control Systems and International Entrepreneurship in Small, Young Firms from Resource-Based Theory, Contingence, and Effectuation Approach Perspectives," JRFM, MDPI, vol. 15(8), pages 1-23, August.
    2. Chen, Clara Xiaoling & Lill, Jeremy B. & Lucianetti, Lorenzo, 2023. "Performance measurement system diversity and product innovation: Evidence from longitudinal survey data," Accounting, Organizations and Society, Elsevier, vol. 111(C).
    3. Christoph Feichter & Isabella Grabner, 2020. "Empirische Forschung zu Management Control – Ein Überblick und neue Trends [Empirical Management Control Reserach—An Overview and Future Directions]," Schmalenbach Journal of Business Research, Springer, vol. 72(2), pages 149-181, June.
    4. Bedford, David S., 2020. "Conceptual and empirical issues in understanding management control combinations," Accounting, Organizations and Society, Elsevier, vol. 86(C).
    5. Manthei, Kathrin & Sliwka, Dirk & Vogelsang, Timo, 2021. "Information Provision, Incentives, and Attention: A Field Experiment on Facilitating and Influencing Managers' Decisions," IZA Discussion Papers 14199, Institute of Labor Economics (IZA).
    6. Choi, Jongwoon (Willie), 2020. "Studying “and”: A perspective on studying the interdependence between management control practices," Accounting, Organizations and Society, Elsevier, vol. 86(C).

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