A Practical Guide to using Mediation and Moderation Analyses in Accounting Research

40 Pages Posted: 18 Feb 2021

See all articles by S. Jane (Kennedy) Jollineau

S. Jane (Kennedy) Jollineau

Chapman University - The George L. Argyros School of Business & Economics; University of Washington - Foster School of Business

Robert M. Bowen

Chapman University - The George L. Argyros School of Business & Economics; University of Washington - Foster School of Business

Date Written: February 15, 2021

Abstract

Mediation and moderation analyses are increasingly being used in accounting research. In this manuscript, we explain mediation and moderation analyses in plain-English, and demonstrate how to use an efficient tool to help build your theory, provide inferential tests of indirect (mediated) effects, and interpret your results. Briefly, mediation is an expansion of the relation between an independent variable (X) and a dependent variable (Y); it seeks to explain how or why X influences Y, i.e., the mechanism underlying the basic hypothesized relationship. An independent variable can affect the dependent variable directly (as in most models), indirectly through mediators, or both. Moderation is a conditional analysis (equivalent to an interaction in regression analysis); it seeks to understand when X influences Y or for whom the relationship exists or varies in strength or sign. Moderated mediation is when the mediated relationship between X and Y is conditioned by variable W. Many theories in accounting research can be conceptualized as mediated, moderated or moderated-mediation models to investigate both simple and complex hypothesized relationships as they seek to understand how and when X influences Y. Analyses using these models capture the dependent nature of an entire set of relationships rather than attempting to make piecemeal inferences from a series of univariate regressions that may not be as revealing and may even yield misleading inferences. Tools such as the PROCESS macro (Hayes 2020) facilitate examination of a set of conditional relationships, reduce the number of inferential tests that are relied on, and use bootstrapping for inferential tests of moderated mediation that do not rely on distributional assumptions. We provide two examples from published research to illustrate these concepts and analysis using the PROCESS macro.

Keywords: theory-based model-building, statistics, method, mediation, moderation, indirect versus direct effects, interaction, mechanisms, PROCESS, bootstrapping, confidence intervals

JEL Classification: C12, C18, C87, C90, M41, M42, M49

Suggested Citation

Kennedy Jollineau, S. Jane and Bowen, Robert M., A Practical Guide to using Mediation and Moderation Analyses in Accounting Research (February 15, 2021). Available at SSRN: https://ssrn.com/abstract=3786380 or http://dx.doi.org/10.2139/ssrn.3786380

S. Jane Kennedy Jollineau (Contact Author)

Chapman University - The George L. Argyros School of Business & Economics ( email )

333 N. Glassell
Orange, CA 92866
United States
206.227.7868 (Phone)

HOME PAGE: http://www.chapman.edu/our-faculty/jane-jollineau

University of Washington - Foster School of Business ( email )

Seattle, WA 98195-3226
United States
206.227.7868 (Phone)

Robert M. Bowen

Chapman University - The George L. Argyros School of Business & Economics ( email )

333 N. Glassell
Orange, CA 92866
United States
206.334.0911 (Phone)

HOME PAGE: http://www.chapman.edu/our-faculty/robert-bowen

University of Washington - Foster School of Business ( email )

Box 353226
University of Washington
Seattle, WA 98195-3226
United States
206.334.0911 (Phone)

HOME PAGE: http://foster.uw.edu/faculty-research/directory/robert-bowen/

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