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  • Code for multiple interaction effects

    I have a question regarding multiple interaction effects in the same model. I'm doing research on the effect of ESG performance (IV) on high-growth (binary DV) and how growth mode (organically through innovation vs inorganically through acquisitions) moderates this relationship. I want to include both moderators in the model at the same time. How do I correctly write the code for this? If I include two interaction effects it omits ESGscore because of collinearity. See below

    xtprobit hgfstatus c.esgscore##i.acquisitions c.esgscore##c.rdintensity, re vce(robust)
    note: esgscore omitted because of collinearity.

    The following option I found online on how to incorporate multiple moderators also yields me a 'triple' interaction effect. Is this the correct way to measure the moderating effect of both R&D intensity and acquired growth on the relationship between ESG performance and firm growth? How do I interpret this interaction effect between the three variables?

    xtprobit hgfstatus c.esgscore##c.rdintensity##i.acquisitions, re vce(robust)

  • #2
    Jelle:
    welcome to this forum.
    Your last code seems correct.
    Personally, I shy away from triple interactions, as they are difficult to explain to a non-technical audience.
    Kind regards,
    Carlo
    (Stata 19.0)

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