Hi,
I am working on a paper concerning different strategies in sourcing Intermediate inputs in production. My outcome variable is a categorical variable taking values 1-5. I want to check whether there are any significant differences in the organization of the firm across these categories. To do that I have been running -mlogit-, with some independent variables. However, since these are European firms, I hypothesise that there might be differences between Northern and Southern Europe, and I would like to see if there are any differences in the structure of the firm also across these two regions. I was wondering if this can be done by just splitting the sample in North and South, and then run two independent -mlogit x1 x2 ... if North == 1- and -mlogit x1 x2 ... if South == 1- and then just list them next to each other, and compare like (Note: it is not a causal study, I am just trying to see whether there are significant differences in the structure of the firm):
For example, with these results I could say something like: Both in the South and the North being an exporter increases the relative probability that the firm is using FO, DIFO, or FI over DO.
In the South, exporting significantly increases the log odds of using DI over DO, while there is no significant effect in the North. This suggests that exporting and foreign sourcing is positively related in the North, while in the South, the relative probability of all other sourcing strategies compared to DO increases if a firm also exports some of its production.
I guess I could need some advice on how to formulate an interpretation that is not sounding causal, since this is not a causal study. It should not sound like exporting causes the relative probability of FI to increase, but rather that firms that export are relatively more likely to use FI than DO. :D
All firms in the sample is either in the North or in the South, so I was wondering if this could possibly be done within the same model using interaction terms, but I was not certain of how to interpret the results then. I tried making an example, but it just does not make sense to me:
Here exportern is an interaction term: exporting*North.
I am working on a paper concerning different strategies in sourcing Intermediate inputs in production. My outcome variable is a categorical variable taking values 1-5. I want to check whether there are any significant differences in the organization of the firm across these categories. To do that I have been running -mlogit-, with some independent variables. However, since these are European firms, I hypothesise that there might be differences between Northern and Southern Europe, and I would like to see if there are any differences in the structure of the firm also across these two regions. I was wondering if this can be done by just splitting the sample in North and South, and then run two independent -mlogit x1 x2 ... if North == 1- and -mlogit x1 x2 ... if South == 1- and then just list them next to each other, and compare like (Note: it is not a causal study, I am just trying to see whether there are significant differences in the structure of the firm):
Code:
. mlogit sourcingmode tfp2008 exporter if coresample == 1 & north == 1, robust base(1) Iteration 0: log pseudolikelihood = -3185.0168 Iteration 1: log pseudolikelihood = -3092.6962 Iteration 2: log pseudolikelihood = -3089.8223 Iteration 3: log pseudolikelihood = -3089.7949 Iteration 4: log pseudolikelihood = -3089.7949 Multinomial logistic regression Number of obs = 2,261 Wald chi2(8) = 162.29 Prob > chi2 = 0.0000 Log pseudolikelihood = -3089.7949 Pseudo R2 = 0.0299 ------------------------------------------------------------------------------ | Robust sourcingmode | Coef. Std. Err. z P>|z| [95% Conf. Interval] -------------+---------------------------------------------------------------- DO | (base outcome) -------------+---------------------------------------------------------------- DI | tfp2008 | .0463079 .1671139 0.28 0.782 -.2812293 .3738451 exporter | -.165352 .1630326 -1.01 0.310 -.4848899 .154186 _cons | -1.075222 .1230861 -8.74 0.000 -1.316466 -.8339775 -------------+---------------------------------------------------------------- FO | tfp2008 | .2543847 .0928671 2.74 0.006 .0723686 .4364009 exporter | 1.012922 .1155234 8.77 0.000 .7865008 1.239344 _cons | -.4321649 .0975584 -4.43 0.000 -.6233759 -.2409539 -------------+---------------------------------------------------------------- DIFO | tfp2008 | .2472427 .1828191 1.35 0.176 -.1110762 .6055615 exporter | .8684782 .1846155 4.70 0.000 .5066384 1.230318 _cons | -1.729958 .1585914 -10.91 0.000 -2.040791 -1.419125 -------------+---------------------------------------------------------------- FI | tfp2008 | .552963 .1579696 3.50 0.000 .2433483 .8625778 exporter | 2.014189 .2645019 7.62 0.000 1.495775 2.532603 _cons | -2.737447 .2499555 -10.95 0.000 -3.227351 -2.247544 ------------------------------------------------------------------------------
Code:
. mlogit sourcingmode tfp2008 exporter if coresample == 1 & south == 1, robust base(1) Iteration 0: log pseudolikelihood = -5227.2017 Iteration 1: log pseudolikelihood = -4944.6407 Iteration 2: log pseudolikelihood = -4935.4004 Iteration 3: log pseudolikelihood = -4935.0236 Iteration 4: log pseudolikelihood = -4935.0224 Iteration 5: log pseudolikelihood = -4935.0224 Multinomial logistic regression Number of obs = 4,336 Wald chi2(8) = 438.85 Prob > chi2 = 0.0000 Log pseudolikelihood = -4935.0224 Pseudo R2 = 0.0559 ------------------------------------------------------------------------------ | Robust sourcingmode | Coef. Std. Err. z P>|z| [95% Conf. Interval] -------------+---------------------------------------------------------------- DO | (base outcome) -------------+---------------------------------------------------------------- DI | tfp2008 | .8361852 .1292515 6.47 0.000 .582857 1.089513 exporter | .309192 .12668 2.44 0.015 .0609037 .5574802 _cons | -1.939009 .1045761 -18.54 0.000 -2.143974 -1.734043 -------------+---------------------------------------------------------------- FO | tfp2008 | .6267666 .079925 7.84 0.000 .4701166 .7834167 exporter | 1.34326 .0871128 15.42 0.000 1.172522 1.513998 _cons | -1.285744 .0778412 -16.52 0.000 -1.43831 -1.133178 -------------+---------------------------------------------------------------- DIFO | tfp2008 | 1.275918 .1410801 9.04 0.000 .9994066 1.55243 exporter | 1.565335 .1866388 8.39 0.000 1.19953 1.93114 _cons | -3.041633 .1732831 -17.55 0.000 -3.381261 -2.702004 -------------+---------------------------------------------------------------- FI | tfp2008 | 1.39548 .2435528 5.73 0.000 .9181253 1.872835 exporter | 2.857254 .4582993 6.23 0.000 1.959003 3.755504 _cons | -4.988943 .4496186 -11.10 0.000 -5.87018 -4.107707 ------------------------------------------------------------------------------
In the South, exporting significantly increases the log odds of using DI over DO, while there is no significant effect in the North. This suggests that exporting and foreign sourcing is positively related in the North, while in the South, the relative probability of all other sourcing strategies compared to DO increases if a firm also exports some of its production.
I guess I could need some advice on how to formulate an interpretation that is not sounding causal, since this is not a causal study. It should not sound like exporting causes the relative probability of FI to increase, but rather that firms that export are relatively more likely to use FI than DO. :D
All firms in the sample is either in the North or in the South, so I was wondering if this could possibly be done within the same model using interaction terms, but I was not certain of how to interpret the results then. I tried making an example, but it just does not make sense to me:
Code:
. mlogit sourcingmode tfp2008 exporter exportern if coresample == 1, robust base(1) Iteration 0: log pseudolikelihood = -8560.3337 Iteration 1: log pseudolikelihood = -8128.4708 Iteration 2: log pseudolikelihood = -8099.7006 Iteration 3: log pseudolikelihood = -8099.396 Iteration 4: log pseudolikelihood = -8099.3953 Multinomial logistic regression Number of obs = 6,597 Wald chi2(12) = 714.31 Prob > chi2 = 0.0000 Log pseudolikelihood = -8099.3953 Pseudo R2 = 0.0538 ------------------------------------------------------------------------------ | Robust sourcingmode | Coef. Std. Err. z P>|z| [95% Conf. Interval] -------------+---------------------------------------------------------------- DO | (base outcome) -------------+---------------------------------------------------------------- DI | tfp2008 | .5797641 .1048356 5.53 0.000 .37429 .7852382 exporter | -.0103951 .1059574 -0.10 0.922 -.2180678 .1972776 exportern | .4099698 .1304038 3.14 0.002 .1543831 .6655566 _cons | -1.649886 .078551 -21.00 0.000 -1.803843 -1.495929 -------------+---------------------------------------------------------------- FO | tfp2008 | .5399869 .0619008 8.72 0.000 .4186636 .6613101 exporter | 1.036042 .0716425 14.46 0.000 .8956254 1.176459 exportern | .5510883 .0742808 7.42 0.000 .4055007 .696676 _cons | -.9994194 .0597341 -16.73 0.000 -1.116496 -.8823427 -------------+---------------------------------------------------------------- DIFO | tfp2008 | .8820604 .1147819 7.68 0.000 .657092 1.107029 exporter | 1.029363 .1329755 7.74 0.000 .7687362 1.289991 exportern | .5856167 .117866 4.97 0.000 .3546036 .8166298 _cons | -2.51832 .1146602 -21.96 0.000 -2.74305 -2.29359 -------------+---------------------------------------------------------------- FI | tfp2008 | 1.005622 .136158 7.39 0.000 .7387571 1.272487 exporter | 1.694092 .2332873 7.26 0.000 1.236858 2.151327 exportern | 1.387403 .1277538 10.86 0.000 1.13701 1.637796 _cons | -3.83035 .2153664 -17.79 0.000 -4.25246 -3.408239 ------------------------------------------------------------------------------