Quality & Quantity 37: 435–442, 2003.
© 2003 Kluwer Academic Publishers. Printed in the Netherlands.
Continuous Dependent Variables and
Organizational Ecology: Toward a more Perfect
JOEL P. RUDIN
Department of Management, Rowan University, 201 Mullica Hill Road, Glassboro, NJ 08028,
Abstract. In this paper, I review all previously published organizational ecology research which
utilizes continuous dependent variables. I unearth twenty-one such studies, half of which were pub-
lished within the past four years. The broadening array of dependent variables in this ﬁeld is a most
welcome development. However, each of these papers has at least one methodological limitation,
in speciﬁcation of cross-unit effects and/or controls for autocorrelation. Perhaps the most serious
problem is the assertion that the ﬁxed effects research design solves the problem of autocorrelation.
I demonstrate that this assertion is untrue. I conclude with advice on the proper way to model con-
tinuous dependent variables in organizational ecology research, as follows: (1) Consider omitting all
organizations which do not exist for more time periods than the number of independent variables. (2)
Test for autocorrelation, report the results, and correct for autocorrelation if the test indicates that it
is a problem. (3) Use a ﬁxed effects model, and justify it based on the nonrandomness of the data.
Key words: organizational ecology, continuous dependent variables, literature review, ﬁxed effects
Research into the dynamics of populations of organizations has been inspired by
organizational ecology theory (Hannan and Freeman, 1977), and has developed
into a major branch of organizational sociology in the past twenty-ﬁve years. Com-
mon characteristics of empirical studies of populations of organizations include the
following (Amburgey and Rao, 1996):
(1) An entire population of organizations, rather than a sample drawn from a larger
population, is studied over time.
(2) Some of the independent variables measure features of each organization, while
the other independent variables measure aspects of the organizations’ environ-