Hierarchical modelling in international business research: Patterns, problems, and practical guidelines

Abstract International Business (IB) phenomena often encompass activities at the nation, industry, firm, and individual levels. Consequently, empirical analyses in IB often consider at least two levels of analysis; failing to do so represents omitted variable bias. In this Perspectives paper, we review and evaluate the use and misuse of multi-level methods in IB, suggesting that IB scholars often fail to employ explicitly multilevel approaches when confronted with multi-level phenomena. We also assess different multi-level modeling techniques, noting that despite different nomenclature, many are functionally equivalent, and offer suggestions for best practices in the deployment of multi-level methods in IB.