Improving Our Understanding of Moderation and Mediation in Strategic Management Research

We clarify differences among moderation, partial mediation, and full mediation and identify methodological problems related to moderation and mediation from a review of articles in Strategic Management Journal and Organization Science published from 2005 to 2014. Regarding moderation, we discuss measurement error, range restriction, and unequal sample sizes across moderator-based subgroups; insufficient statistical power; the artificial categorization of continuous variables; assumed negative consequences of correlations between product terms and its components (i.e., multicollinearity); and interpretation of first-order effects based on models excluding product terms. Regarding mediation, we discuss problems…