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4.4. ANALYSES 109 RPE and RFMO. Moreover, in line with the base model, RFMO is driven by goal ambiguity (positively), measurability of outputs (negatively), and decentralization of decision rights. However, the relation between information asymmetry and RFMO is marginally insignificant (one-tailed p-value = 0.13). The results of the robustness check are summarized in table 4.13. Table 4.13: Results of SEM Analysis (RPE-based-Targets) Panel A - base model results Coefficient Std. Error Critical Ratio Prob. RPE use > RFMO 0.136 0.059 2.422 0.02 ‘a’ Inf. Asymmetry > RFMO 0.071 0.075 1.150 0.13 ‘a’ Inf. Asymmetry > RPE use 0.007 0.070 0.114 0.46 ‘a’ Goal Ambiguity > RFMO 0.184 0.135 2.685 0.00 ‘a’ Meas. of Outputs > RFMO -0.206 0.119 -2.866 0.00 ‘a’ Decentralization > RFMO 0.118 0.060 1.921 0.03 ‘a’ Dummy prod. > RFMO 0.092 0.170 1.581 0.11 Dummy fin. serv. > RFMO 0.002 0.177 0.030 0.98 Dummy N.F.P. > RFMO 0.009 0.176 0.143 0.89 ‘a’ : variable based on directional expectation; significance calculated as onetailed p-value Panel B - base model fit statistics Chi 2 = 19.436 goodness-of-fit statistics Degrees of freedom = 6 GFI = 0.985 Probability level = .003 AGFI = 0.888 CFI = 0.948 Multivariate normality RMR = 0.030 Kurtosis 2.783 (c.r. 1.643) RMSEA = 0.090 Panel C - bootstrap results Bootstrap samples = 500 Bollen-Stine bootstrap p = 0.025 4.4.2.3 Endogeneity Analysis Similar to the previous chapter, this chapter’s dependent variable may be jointly determined with one of the independent variables. This relation exists between room for managerial opportunism and RPE use because RPE use can reduce the room for managerial opportunism, but increased room for opportunism can also induce organizational reliance on RPE. As described in chapter 3, this possibility raises endogeneity concerns. Endogeneity is a key limitation in most empirical research (Ittner & Larcker 2001). Endogeneity is
110 CHAPTER 4. OPPORTUNISM MITIGATION EFFECTIVENESS an econometric problem that leads to biased and inconsistent estimators within equations used to test theoretical propositions. This bias renders inferences problematic and consequently reduces the confidence in the conclusions drawn from the research (Chenhall & Moers 2007). Thus, endogeneity can cause the null-findings of the presented analyses. I partially mitigate this problem in the models presented in the preceding sections by including the effect of information asymmetry, mediated by RPE use, on room for managerial opportunism, because information asymmetry can influence both RPE use and room for managerial opportunism simultaneously. Additionally, I conduct a robustness check on the models analyses to address the issue of potential remaining endogeneity with a Hausman test. Endogeneity is assessed for both RPE measures (RPE-Use and RPE-based-Targets). However, as the procedure and the results are similar for both RPE measures, only the test for the primary RPE measure (RPE-Use) is described in this section. Antonakis et al. (2010) recommend the Hausman test to assess endogeneity problems in SEM. The Hausman statistic is computed by conducting two OLS regressions after one another. The first regression predicts RPE-Use based on one or more instrumental variables, and all other variables in the original equation. The instrumental variable(s) should correlate with RPE-Use, but not with the error term of the structural model (Larcker & Rusticus 2010). The second regression includes the original (observed) RPE-Use measure, the predicted RPE-Use measure from the first stage and the original independent variables. The Hausman test assesses the significance of the predicted RPE-Use in the second regression. Proper instrumental variables should be both relevant (i.e., they should be related to the endogenous explanatory variable RPE use) and exogenous (i.e., they should be unrelated to the undefined residual of room for managerial opportunism). In my analyses, I select one instrumental variable from the questionnaire that I associate with RPE use. This item asks to what extent peer performance is a point of reference for the respondent’s superior when evaluating the HR function in the respondent’s business unit. Whereas RPE use refers to the performance evaluation of the business unit manager, the questionnaire item focuses on the general assessment of a smaller organizational part. Still, both RPE use and the selected questionnaire item relate to some kind of peer comparison for the evaluation of organizational parts. Therefore, I believe that the selected questionnaire item is related to RPE use and that it is a relevant instrumental variable. Arguing why an instrumental variable is exogenous, is, however, problematic in most research, because it requires one to demonstrate that an instrumental variable is not associated with the undefined structural residual. However, what researchers can do instead is to try to find reasons that falsify this association’s non-existence. To the best of my ability, I could not find a theoretical argument for how the use of peer performance as a point of reference for the evaluation of the HR function is related to the structural residual of
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Relative Performance Evaluation in
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NYENRODE BUSINESS UNIVERSITEIT Rela
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Table of Contents Preface 1 General
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Preface Why do people make things h
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2 CHAPTER 1. GENERAL INTRODUCTION I
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Chapter 2 The Use of Relative Perfo
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2.1. INTRODUCTION 15 is not a promi
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2.2. THEORETICAL BACKGROUND 17 The
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2.2. THEORETICAL BACKGROUND 19 Sinc
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2.2. THEORETICAL BACKGROUND 21 who
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2.2. THEORETICAL BACKGROUND 23 suff
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2.3. SAMPLE AND MEASUREMENT 25 2.2.
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2.3. SAMPLE AND MEASUREMENT 27 2.3.
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2.3. SAMPLE AND MEASUREMENT 29 can
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2.3. SAMPLE AND MEASUREMENT 31 Comp
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2.3. SAMPLE AND MEASUREMENT 33 this
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2.3. SAMPLE AND MEASUREMENT 35 Emph
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2.4. ANALYSES 37 2.4 Analyses This
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2.4. ANALYSES 39 Table 2.8: RPE use
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2.4. ANALYSES 41 2.4.2 Correlations
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2.4. ANALYSES 43 Concerning the con
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2.4. ANALYSES 45 Table 2.13: Result
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2.4. ANALYSES 47 Table 2.15: Summar
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2.5. CONCLUSIONS AND DISCUSSION 49
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2.5. CONCLUSIONS AND DISCUSSION 51
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2.6. CONTRACTIBILITY MIMIC MODEL (A
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2.7. ANALYSES FOR FOR-PROFIT BUS (A
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Page 74 and 75: 3.2. DEVELOPMENT OF THE MODEL 65 RP
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Page 92 and 93: 3.4. ANALYSES 83 Larcker & Rusticus
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Page 138 and 139: Appendix Overview of Questionnaire
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Page 142 and 143: Q14 When serving your clients, how
Page 144 and 145: Q23 Please indicate whether you agr
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Page 148 and 149: References 1. Abernethy, M.A., Bouw
Page 150 and 151: 26. Diamantopoulos, A. & Siguaw, J.
Page 152 and 153: 52. Himmelberg, C.P. & Hubbard R.G.
Page 154: 83. Towry, K. 2003. ‘Control in a
Page 157 and 158: 148 beïnvloeden, veroorzaken ruis
Page 160 and 161: Biography Hilco van Elten (1979) ho
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