Restricted Variance Interaction Effects: What They Are and Why They Are Your Friends

Author:

Cortina Jose M.1,Koehler Tine2,Keeler Kathleen R.1,Nielsen Bo Bernhard34

Affiliation:

1. Virginia Commonwealth University

2. University of Melbourne

3. University of Sydney

4. Copenhagen Business School

Abstract

Although interaction hypotheses are increasingly common in our field, many recent articles point out that authors often have difficulty justifying them. The purpose of this article is to describe a particular type of interaction: the restricted variance (RV) interaction. The essence of the RV interaction is that, as the value of one variable in a system changes, certain values of another variable in the system become less plausible, thus restricting its variance. This, in turn, influences relationships between that variable and other variables. These types of interactions are quite common, even if they are not recognized as RV interactions, and they exist at every level of analysis. The advantage of the RV interaction is that, as compared with other interaction types, it is relatively simple to justify. The different forms of RV interaction do, however, contain complexities of which a researcher must be aware. This article explains and illustrates the forms that RV interactions can take and their often counterintuitive implications. It also describes how one should go about testing them. Our intention is to help researchers strengthen and focus their interaction arguments.

Funder

University of Melbourne

University of Sydney

Publisher

SAGE Publications

Subject

Strategy and Management,Finance

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