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  • interpreting interaction coefficient between dummy and continuous variable in IVPOISSON regression

    Hello,

    I run the following model using ivpoisson (instrumental variable for poisson) command :

    ivpoisson imports ( immig emig immig*currency emig*currency = lag_immig lag_emig lag_immig*currency lag_emig*currency ) GDP_origin GDP_destination distance rta currency language colony landlocked, vce(robust) igmm wmatrix(cluster pairid) multiplicative
    1. imports is bilateral imports ;
    2. immig is immigration as share of destination country population ;
    3. emig is emigration as share of origin country population ;
    4. GDP is gross domestic product ;
    5. Rta, language, currency, colony and landlocked are dummies for having a regional trade agreement, common language, common currency, colonial ties and being landlocked.
    In the command, we have in brackets : ( endogenous variable = instruments ). Since migration is endogenous, I also consider the interaction as endogenous variable.

    In the regression results, both immigration and emigration share are positively signed, currency is also positive, but the interactions between migration shares and currency are negative.

    My question is how to interpret this outcome.

    Kind regards,

    Morel


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