4:35 and the idea behind it is crystal clear compared to my lecturer mumbling on about it for 10 minutes without having a clue in the end. thank you so much!
So when do we actually interact our variables? Is there a way to see if it is necessary or do we just do it and then see if the coefficient on the interaction term is statistically significant?
Hi! I would like to ask if your main explanatory variable (continuous, diversification) has a negative coefficient (reduces risk) and then the interaction between that variable and a dummy variable (diversificationXcrisis) has a positive coefficient; then does it mean that the moderator variable enhances the effect of the main explanatory variable (diversification effect is greater in crisis periods)? Even if the sign of the main explanatory variable was negative? Thanks a lot.
Hi there, when I have a dummy variable, a continuous variable and interaction term, does the coefficient of the dummy variable still indicate the results of when it equals 1 (regardless of the continuous variable) unlike the coefficient for the continuous variable, which only represents the values for the continuous variable when dummy =0?
Hi Ben, The last part is not clear. What is the meaning of the (Beta1 + Beta3) in regression model. i.e. interaction of dummy and continuous variable ?
Hi. I has the same question with Laura. My independent variable (trade protection) is negatively related to dependent variable (productivity). And the interactive dummy with this independent variable (MNE*tp) show negative sig. result. Thus mne reduce the slope of the negative impact of tp to productivity means, mne presence reduce the negative impact of tp on productivity, which means mne fo hand in hand with trade liberalization will create better productivity, right? Urgent, please help.
Hi, thanks for your message. Dependent on the circumstances, then the interaction shows what is the change to the incremental effect of variable 1, for a one unit increase in variable 2. Hope that helps! Best, Ben