Question about two main effects and their interactions in panel data

[Quinn Ye]

Question about two main effects and their interactions in panel data

• Data structure

Firm	Year	DV	Iv1	Iv2	Control
1	2001	0.2	0.1	0.2	..
1	2002	0.3	0.3	0.2	..
1	2003	0.1	0.2	0.3	..
2	2002	0.4	0.5	0.1	..
2	2003	0.5	0.4	0.2	..
3	2001	0.2	0.1	0.3	..
3	2002	0.1	0.4	0.5	..
3	2003	0.4	0.2	0.1	..
...

• Describe Data

1. Iv1 = “std_GLF”
2. Iv2 = “std_GF2”
3. DV = “RDIntensity”

• Analysis Purpose
  1. To analysis the effect of Iv1 on DV
  2. To analysis the effect of Iv2 on DV
  3. To analysis the interactive effect of lv1 and Iv2 on DV
• Current Stata Practice
  1. xtreg RDIntensity std_GLF control1 control2 control3 control4 control5 ,fe
  2. xtreg RDIntensity std_GF2 control1 control2 control3 control4 control5 ,fe
  3. xtreg RDIntensity c.Iv2##c.Iv2 control1 control2 control3 control4 control5 ,fe
• Results
  
  a.
  
  
  b.
  
  c.
  
• Questions
  1. Did I conduct correct analysis?
  2. How could I interpret the result?
  3. If I code the Iv1 and Iv2 into “high” and “low” factorial variables, with such panel data structure, how could I perform a “ANOVA like” analysis to see the interaction of two main effects?