Abstract
Management research has benefited from the incorporation of social network theory, which helps explain the intrinsic social complexity in diffusion processes. However, this complexity requires statistical methods that better capture the relational nature of the data and changes occurring over time. Failure to do so could lead to erroneous conclusions for theory and practice. In this paper we highlight some of the methodological problems existing when analyzing social network data with traditional econometric methods. We concentrate on the diffusion of managerial practices literature, reviewing studies where network data has been used and identifying problems that might arise with selected econometric methods. We also present the Stochastic Actor Oriented Model (SAOM) as an alternative statistical method that possesses four advantages over traditional econometric models when using social network data.
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