ESSAY: CHOOSING BETWEEN FIXED AND RANDOM EFFECTS IN PANEL DATA ANALYSIS
DOI:
https://doi.org/10.18568/internext.v19i1.768Keywords:
Quantitative research, Theoretical choices, Methodological choicesAbstract
Objective: In this essay, we address the significance of aligning theoretical and methodological choices in quantitative research, aiming to demystify complex concepts in panel data analysis, specifically the choice between fixed and random effects.
Method: Presented in an essay format with a didactic approach, we elucidate these concepts in clear and comprehensible language, rendering them accessible to a broad audience.
Main Results: We emphasize the importance of theory and methodological choices, including applied statistical techniques, in panel data analysis. We examine the need for a consistent relationship between selected theory and methodology, as well as the importance of grounding intended effects in formulated hypotheses. By discussing the challenges faced by researchers who do not adequately align their theoretical and methodological choices, we seek to demonstrate that such decisions lead to inconsistent and potentially misleading results. We underscore the significance of selecting appropriate estimators that align with developed theory and proposed hypotheses.
Relevance/ Originality: We hope this article serves as a valuable guide for graduate students in Administration and experienced researchers who are acquainting themselves with panel data analysis, assisting them in producing more robust and reliable research.
Theoretical/ Methodological Contributions: This essay significantly contributes to the field of research in Administration by highlighting the importance of coherent alignment between theoretical and methodological choices in quantitative research, with a specific focus on panel data analysis and the selection between fixed and random effects.
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