This week in my meeting with Dr Poon, we encountered a problem about the validity of the use of switching regression in the analysis of the impact of IT upon industry structure, as industries, based on cluster analysis, do not elect to move from cluster to cluster. It was therefore decided in the meeting that there were several options to pursue for this case, listed as below:
1) Continue with Switching Regression
2) Perform a Chou Test
3) Implement Random Coefficient Analysis
Furthermore, a new, raw data set has been compiled for a final fuzzy clustering analysis, the results of which will be posted in the next two days. Additionally, the switching regression problem, if implemented, will use modified equations from Berstchek's 2005 paper analysing organisational change using switching regression. By following this, it is hoped that the results of the switching regression will show that the use of IT leads to a higher productivity, and hence, a change in industry structure caused by IT, which would be found be analysis the outcomes of the switching regression equations, which uses a TRUE/FALSE vector to determine which strategy is the best for each data point.