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st: interpretation of FE model with interaction of 2 dummies with continuous variable


From   P K <statistics_2009@yahoo.de>
To   statalist@hsphsun2.harvard.edu
Subject   st: interpretation of FE model with interaction of 2 dummies with continuous variable
Date   Thu, 16 Jul 2009 01:50:27 +0000 (GMT)

Hi,

I am estimating a fixed-effects panel model with an interaciton between the
following variables:

strategic_change => coded as a dummy (1 if change happens in year t, 0
otherwise)
ceo_change => coded as a dummy (1 if change happens in year t-1, 0
otherwise)
duration_change => continuous variable (duration clock, measured in year
t-1)


The FE regression is:
xtreg   performance    strategic_change 
ceo_change   duration_change   strategic_change*ceo_change
   strategic_change*duration_change
ceo_change*duration_change    strategic_change*ceo_change*duration_change,
fe
 

Results are shown below. My question is how to interpret the interaction terms, especially the last term where I interact two dummy variables (strategic change and CEO change) with a continuous change (duration change). 


Does STATA pick the case that each dummy is 1 as a baseline category, or can I conclude that while the combined effect of strategic change and CEO change is positive and significant (coefficient = 12.66), the combined effect of strategic change, CEO change and change duration is negative and significant (coeff. = -4.91). Does this imply that when strategic change =1 and CEO change =1 and change duration is high/increasing, this has a negative impact on performance?

Thanks a lot,
Pat

 
 
 Results:
 
Variables  Performance (corrected for collinearity) 
Strategic change 2.01 
  (2.06) 
Duration change  (dropped) 
  (dropped) 
CEO change -2.8 
  (4.16) 
Strategic change* change duration -0.47 
  (0.9) 
Strategic change* CEO change 12.66** 
  (4.88) 
Prior CEO change*change duration -0.74 
  (1.8) 
Strategic change* change duration*CEO change -4.91** 
  (1.73) 
_cons                           72.04*   
  (40.33)   
      
No. of Obs. 430   
F statistic               2.46***   
R-Squared 0.09   


      

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