Department of Economics and Business Economics

Keeping it Within Bounds: Regression Analysis of Proportions in International Business

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Keeping it Within Bounds: Regression Analysis of Proportions in International Business. / Wulff, Jesper; Villadsen, Anders Ryom.

In: Journal of International Business Studies, Vol. 51, No. 2, 03.2020, p. 244-262.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

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Wulff, Jesper ; Villadsen, Anders Ryom. / Keeping it Within Bounds: Regression Analysis of Proportions in International Business. In: Journal of International Business Studies. 2020 ; Vol. 51, No. 2. pp. 244-262.

Bibtex

@article{5fef976af80b458e9db0c8a0dddb53fb,
title = "Keeping it Within Bounds: Regression Analysis of Proportions in International Business",
abstract = "International business researchers commonly estimate proportions, percentages, rates, or fractions – so-called “proportional dependent variables”. In this paper, we posit that two regression strategies are particularly pertinent to the international business field: Tobit and fractional regression. Reviewing recent international business research, we find that, while fractional regression is rarely used, analyses from Tobit regression are often incomplete or erroneously interpreted with consequences for the validity of the reported results. Accordingly, we clarify how researchers should choose between Tobit and fractional regression and interpret their results. We present insights based on simple simulations and data examples with associated Stata code and a decision tree for choosing between types of models for use with proportional dependent variables.",
keywords = "Tobit, econometrics < research methods, fractional regression, multiple regression analysis < research methods, proportional dependent variable",
author = "Jesper Wulff and Villadsen, {Anders Ryom}",
year = "2020",
month = mar,
doi = "10.1057/s41267-019-00278-w",
language = "English",
volume = "51",
pages = "244--262",
journal = "Journal of International Business Studies",
issn = "0047-2506",
publisher = "Palgrave Macmillan Ltd.",
number = "2",

}

RIS

TY - JOUR

T1 - Keeping it Within Bounds: Regression Analysis of Proportions in International Business

AU - Wulff, Jesper

AU - Villadsen, Anders Ryom

PY - 2020/3

Y1 - 2020/3

N2 - International business researchers commonly estimate proportions, percentages, rates, or fractions – so-called “proportional dependent variables”. In this paper, we posit that two regression strategies are particularly pertinent to the international business field: Tobit and fractional regression. Reviewing recent international business research, we find that, while fractional regression is rarely used, analyses from Tobit regression are often incomplete or erroneously interpreted with consequences for the validity of the reported results. Accordingly, we clarify how researchers should choose between Tobit and fractional regression and interpret their results. We present insights based on simple simulations and data examples with associated Stata code and a decision tree for choosing between types of models for use with proportional dependent variables.

AB - International business researchers commonly estimate proportions, percentages, rates, or fractions – so-called “proportional dependent variables”. In this paper, we posit that two regression strategies are particularly pertinent to the international business field: Tobit and fractional regression. Reviewing recent international business research, we find that, while fractional regression is rarely used, analyses from Tobit regression are often incomplete or erroneously interpreted with consequences for the validity of the reported results. Accordingly, we clarify how researchers should choose between Tobit and fractional regression and interpret their results. We present insights based on simple simulations and data examples with associated Stata code and a decision tree for choosing between types of models for use with proportional dependent variables.

KW - Tobit

KW - econometrics < research methods

KW - fractional regression

KW - multiple regression analysis < research methods

KW - proportional dependent variable

U2 - 10.1057/s41267-019-00278-w

DO - 10.1057/s41267-019-00278-w

M3 - Journal article

VL - 51

SP - 244

EP - 262

JO - Journal of International Business Studies

JF - Journal of International Business Studies

SN - 0047-2506

IS - 2

ER -