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  • interpretation moderating effect

    Hi,

    For my thesis i look at a possible moderating effect of having a big four auditor between the relation size or leverage and audit quality(measured by discretionary accruals).
    Stata gives me this results:

    Discretionary accruals = constant + size + leverage + Big 4 + interaction(leverage*Big 4) + interaction(size*Big4)+ control variables
    Discretionary accruals = (-0.0038) + 0.0674+000758 + (-0.0230)+ (-0.0753)+ (0.0015)
    Where bold numbers are significant
    In very short my conclusion is that having a Big Four auditor moderates for leverage but not for size ( because leverage*Big4 is significant and size*Big4 not)
    However, i should also do something with the independent variables size, leverage, and big 4.

    Now is my question how to interpret these in order to say something about the moderating effect

    Thank you for the help!

  • #2
    You should look at the margins and marginsplot command. They are set up for this kind of problem.

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