Welcome to CARMA’s Eighth Webcast

Dr. Mike Withers, Texas A&M University

Omitted Variable Bias

Feb. 18, 2022, 12:00 pm – 1:30 pm ET

PowerPoint Slides
Add to Your Calendar

Michael Withers is an associate professor of management and the Gina and Anthony Bahr (’91) Professor in Business in the Mays Business School at Texas A&M University. He received his Ph.D. in strategic management from the W. P. Carey School of Business at Arizona State University. His research interests include corporate governance, director selection and mobility, and the management of resource dependencies through the board of directors. His research has been published or is forthcoming in several journals, including Academy of Management Journal, Academy of Management Review, Strategic Management Journal, Organization Science, Journal of Management, and Academy of Management Perspectives.

Abstract

The omission of relevant explanatory variables in a regression model generally causes its estimators to be biased. This issue is referred to as omitted variable bias (OVB) and is recognized as one of the primary sources of endogeneity. In turn, the concern of OVB is often a key motivating reason for adopting instrumental variable techniques. These techniques typically involve a two-step procedure that constructs a version of the independent variable that does not feature variance due to the omitted variable. While these techniques can help alleviate the OVB concern, they also have critical assumptions that must be met regarding the instrumental variables employed (i.e., relevance and exogeneity). Even when these assumptions are met, instrumental variable techniques are often less efficient than ordinary least square regression. Recently, the impact threshold of a confounding variable (ITCV) has been introduced in organization research. The ITCV can be used to understand whether a statistical inference is changed because of the potential for an omitted variable. In this talk, the issue of OVB will be formally defined, and both instrumental variable techniques and the ITCV will be discussed as ways to help alleviate this concern.

Access Information

  • No registration is needed.
  • Login to your CARMA account.
  • Once you login, in the middle, you will see a section “Active Meetings”.
  • You will see the access link one hour before the event in this section.

Quick Chat with Dr. Mike Withers

Upcoming CARMA Events

  • Feb. 18 2022 – PhD Prep Group
  • March 25, 2022 – Webcast, Dr. Zeki Simsek, A Framework for Literature Review
  • March 25, 2022 – Topic Interest Group
  • April 8, 2022 – Webcast, Dr. Mo Wang, Longitudinal Latent Variable Analysis
  • April 8, 2022 – PhD Prep Group
  • April 22, 2022 – Topic Interest Group