Binned scatterplots: A simple tool to make research easier and better

• Author: Evan Starr,Brent Goldfarb
• Published date: 01 December 2020
• DOI: http://doi.org/10.1002/smj.3199
• Date: 01 December 2020

RESEARCH ARTICLE

Binned scatterplots: A simple tool to make

research easier and better

Evan Starr | Brent Goldfarb

Robert H. Smith School of Business,

University of Maryland, College Park,

Maryland

Correspondence

Evan Starr, Robert H. Smith School of

Business, University of Maryland, College

Park, MD.

Email: estarr@rhsmith.umd.edu

Abstract

Research Summary: We seek to diffuse a graphical

tool—binned scatterplots—which we argue can dra-

matically improve the quality and speed of research in

strategic management. In contrast to the current prac-

tice of showing plots of predicted values, binned sca-

tterplots graph the nonparametric relationship between

two variables, either unconditionally or conditional on

a set of controls, for multiple subgroups. This allows

researchers to quickly detect the shape of that relation-

ship, examine outliers, and assess which part of the

support may be driving a relationship. We propose that

the adoption of binned scatterplots will lead to the

identification of new and interesting phenomena, raise

the credibility of empirical research, and help create

richer theories.

Managerial Summary: Regression analysis often

assumes linear or quadratic relationship forms between

two variables. We seek to diffuse a graphical tool—

binned scatterplots—that allow the researcher and

reader to evaluate whether such assumptions are

maintained throughout the data. For example, binned

scatterplots may clarify that a regression relationship is

nonlinear, or driven by an exceptional firm or a small

set of firms. We propose that using binned scatterplots

will improve the transparency and quality of empirical

work, as well as aid in the development of new phe-

nomena and enhance theory development.

Received: 28 September 2018 Revised: 9 April 2020 Accepted: 12 April 2020 Published on: 10 July 2020

DOI: 10.1002/smj.3199

Strat Mgmt J. 2020;41:2261–2274. wileyonlinelibrary.com/journal/smj © 2020 Strategic Management Society 2261