Dear Statalists,
for my master's thesis, I need to conduct an analysis of how populist rule in the source country affects FDI outflows from that country to a destination country in a given year (2005-2020). I am using a gravity model for the statistical analysis and the PPML estimator. I was able to investigate whether populist rule affects FDI outflows by including it as a dummy variable (1 - populist rule in home country x in year y, 0 - no populist rule in home country x in year y) in the PPML estimation. However, one of my hypotheses aims to investigate whether there is a higher FDI outflow from home countries to destination countries during populist rule if the destination countries are labeled as highly developed in terms of their institutions (dummy variable). Since including a simple interaction term between the two dummy variables (populist rule and highly developed institutions in a host country) would not yield proper results, I would very much appreciate it if you could help me find a suitable statistical tool to test for this. I have heard that ANOVA might be useful, but I still unsure if that is indeed the case. In addition, a different hypothesis that I have should test whether the effect is different depending on the type of populist rule (left-wing vs. right-wing) for which I also have two dummy variables.
Thanks in advance!
Dimitrije
for my master's thesis, I need to conduct an analysis of how populist rule in the source country affects FDI outflows from that country to a destination country in a given year (2005-2020). I am using a gravity model for the statistical analysis and the PPML estimator. I was able to investigate whether populist rule affects FDI outflows by including it as a dummy variable (1 - populist rule in home country x in year y, 0 - no populist rule in home country x in year y) in the PPML estimation. However, one of my hypotheses aims to investigate whether there is a higher FDI outflow from home countries to destination countries during populist rule if the destination countries are labeled as highly developed in terms of their institutions (dummy variable). Since including a simple interaction term between the two dummy variables (populist rule and highly developed institutions in a host country) would not yield proper results, I would very much appreciate it if you could help me find a suitable statistical tool to test for this. I have heard that ANOVA might be useful, but I still unsure if that is indeed the case. In addition, a different hypothesis that I have should test whether the effect is different depending on the type of populist rule (left-wing vs. right-wing) for which I also have two dummy variables.
Thanks in advance!
Dimitrije
