On the Use of Computer-Aided Text Analysis in International Business Research

Abstract

Research summary

This article demonstrates the potential of computer-aided text analysis (CATA) as a technique to operationalize hard-to-measure constructs in international business research, provided that a rigorous set of validity tests is applied. CATA allows researchers to perform content analyses on large textual databases by constructing indicators using deductively and inductively derived keywords. We show the critical validity steps that have to be followed to arrive at valid CATA indicators. We illustrate the CATA technique through an application to the concept of global mind-set, which has received substantial attention in the international business and strategy literature. We conclude that CATA analysis is a valuable method for international business research, but that its potential can be unleashed only with proper procedures and due attention to construct validity.

Managerial summary

With the increasing availability of large textual databases such as collections of press releases, newswire archives, and SEC filings, computer-aided text analysis (CATA) creates new opportunities to analyze otherwise unobserved firm and managerial traits. CATA can be applied to a broad range of firm activities and industries across long time periods, while eschewing the low response rates typical for surveys. In this article, we demonstrate the critical validity steps that have to be followed to arrive at valid CATA indicators of firm and managerial traits, with an application to international business. As an empirical illustration, we build a keyword-based indicator of firms' global mind-sets using a large dataset of news articles. Copyright © 2017 Strategic Management Society.