Hi all,
This is probably quite a basic question but just wanted to clarify something. In my regression, I consider the effect of overlapping and non-overlapping knowledge between a target and acquiring firm on the innovative performance (number of patents, count variable) of the acquiring firm. Since I suspect a non-linear relationship, I have included the quantity of overlapping patents (count variable), as well as the squared term. Quantity of overlapping patents is positive and significant, and squared term is negative and significant. Hence, this shows an inverse U relationship between quantity of overlapping patents and innovative performance.
However, for the non-overlapping quantity (also count variable), the sign is negative, and it's squared term positive (both significant). What exactly positive squared term show? A non-linear, U relationship between the two? Intuitively, I expected an inverse U relationship.
Apologies if this question is elementary.
Thanks
Chris
This is probably quite a basic question but just wanted to clarify something. In my regression, I consider the effect of overlapping and non-overlapping knowledge between a target and acquiring firm on the innovative performance (number of patents, count variable) of the acquiring firm. Since I suspect a non-linear relationship, I have included the quantity of overlapping patents (count variable), as well as the squared term. Quantity of overlapping patents is positive and significant, and squared term is negative and significant. Hence, this shows an inverse U relationship between quantity of overlapping patents and innovative performance.
However, for the non-overlapping quantity (also count variable), the sign is negative, and it's squared term positive (both significant). What exactly positive squared term show? A non-linear, U relationship between the two? Intuitively, I expected an inverse U relationship.
Apologies if this question is elementary.
Thanks
Chris
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