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# st: indicator variable and interaction term different signs but both significant

 From Nahla Betelmal To statalist@hsphsun2.harvard.edu Subject st: indicator variable and interaction term different signs but both significant Date Sat, 6 Apr 2013 22:45:31 +0100

```Dear Statalist,

I am having difficulty interpreting the results from OSL regression. I
am trying to see whether Overconfident managers manipulate earnings in
a certain context.

The dependent variable earnings_Mgt is continuous  The problem is that
the indicator variable for overconfidence (OC_D) is negative and
significant, while the interaction between the indicator variable and
market_value variable (OC_MV) is positive and significant. What does
that mean?
Does it mean that overconfident managers manipulate earnings less than
others (rational managers), but when the market value is high they
manipulate earnings more than rational managers do?

many thanks

Nahla Betelmal

Linear regression		 Number of obs	= 56
F( 8, 47)	= 3.60
Prob > F	= 0.0025
R-squared	= 0.3719
Root MSE	= .08355
Robust
earnings Mgt       Coef.	Std. Err.	t	  P>t	        [95% Conf.	Interval]
size                .0058268	.0092169	0.63	  0.530	-.0127153	.0243689
leverage          .0924198	.0724032	1.28	  0.208	-.0532367	.2380763
MV                 .0046896	.0032752	1.43	  0.159	-.0018993	.0112784
litigation          .0310148	.0267527	1.16	   0.252	-.0228048	.0848344
private_D        -.0638102	.023056	-2.77	0.008	-.110193	-.0174275
same_D            -.08197	.0273465	-3.00	0.004	-.136984	-.026956
OC_D            -.0730767	.0288269	-2.54	0.015	-.131069	-.0150844
OC_MV          .0105348	.0049493	2.13	0.039	.000578	.0204916
_cons              .0381444	.0615391	0.62	0.538	-.0856564	.1619452
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```