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From |
Richard Williams <richardwilliams.ndu@gmail.com> |

To |
statalist@hsphsun2.harvard.edu, statalist@hsphsun2.harvard.edu |

Subject |
Re: st: indicator variable and interaction term different signs but both significant |

Date |
Sat, 06 Apr 2013 19:32:37 -0400 |

At 06:45 PM 4/6/2013, Nahla Betelmal wrote:

Thanks Anthony for the reply. Actually Overconfidence indicator variable takes value of 1 for overconfident managers, and value of zero for rational managers. The market value variable is a continuous positive variable. I am not sure that interpreting the indicator variable (OC_D) has literal interpretation in the interaction model, I am confused due to the significance ! otherwise I would only have focused on the interaction term (i.e. overconfident managers manipulate earnings upwardly when the market value of their firms is high) but I am not sure if I got it right. Many thanks, and I am looking for others responses as well Nahla On 6 April 2013 23:24, Anthony Fulginiti <fulginit@usc.edu> wrote: > Hi Nahla, >> I would recommend waiting for others on Statalist to respond toprovide confirmation of my interpretation. However, my thoughtsare that this is suggesting that your main effect foroverconfidence is suggesting that overconfident managers manipulateearnings less than other managers (if that is the reference group)at market value 0. The interaction would then suggest that theeffect of the overconfidence variable on earnings manipulation isincreasingly greater at higher market values. I look forward tohearing other replies.> > > Anthony > > > On Apr 6, 2013, at 2:45 PM, Nahla Betelmal wrote: > >> 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? >> >> Your help is highly appreciated, >> >> 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>> * >> * For searches and help try: >> * http://www.stata.com/help.cgi?search >> * http://www.stata.com/support/faqs/resources/statalist-faq/ >> * http://www.ats.ucla.edu/stat/stata/ > > > * > * For searches and help try: > * http://www.stata.com/help.cgi?search > * http://www.stata.com/support/faqs/resources/statalist-faq/ > * http://www.ats.ucla.edu/stat/stata/ * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

------------------------------------------- Richard Williams, Notre Dame Dept of Sociology OFFICE: (574)631-6668, (574)631-6463 HOME: (574)289-5227 EMAIL: Richard.A.Williams.5@ND.Edu WWW: http://www.nd.edu/~rwilliam * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: indicator variable and interaction term different signs but both significant***From:*Nahla Betelmal <nahlaib@gmail.com>

**References**:**st: indicator variable and interaction term different signs but both significant***From:*Nahla Betelmal <nahlaib@gmail.com>

**Re: st: indicator variable and interaction term different signs but both significant***From:*Anthony Fulginiti <fulginit@usc.edu>

**Re: st: indicator variable and interaction term different signs but both significant***From:*Nahla Betelmal <nahlaib@gmail.com>

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