Can you please tell me if my interpretation is correct?
In model (1), with an estimated coefficient of -.0187 the dummy for the second year of observations is negative and significant on the one percent level. That means minus 18.7 percent post treatment change for the untreated individuals or in other words, non-adopting firms sell, on average, 18.7 percent less, ceteris paribus. The ICT adoption dummy, significant at the five percent level, is the pre-treatment difference between treated and untreated. With an estimated coefficient of 0.543, this indicates an average pre-treatment difference in sales of 54.3 percent for treated over untreated firms. This indicates that firms who adopt ICT between year 1 and 2 already had on average higher sales than those who did not, ceteris paribus. As a consequence, have I simply compared outcomes of treated and untreated firms in year 2, the estimated effect of the treatment would have been biased upwards. The interaction term between the second year dummy variable and ICT adoption is significant at the one percent level. The estimated coefficient is 0.444, this means that for ICT adopted firms between year one and year two, sales increased on average by 44 percent more than that of non-adopting firms, ceteris paribus. [Add -18.7 to 44.4 to get wave on wave % change in sales for adopting firms]
Code:
. xtreg LogSales c.dum_ICT##(c.Year2 c.LogFirmSize c.c6) c.LogFirmAge c.b2b i.Cid, vce(cluster i)
Random-effects GLS regression Number of obs = 7,720
Group variable: i Number of groups = 4,404
R-sq: Obs per group:
within = 0.1352 min = 1
between = 0.7384 avg = 1.8
overall = 0.6387 max = 2
Wald chi2(35) = 15608.20
corr(u_i, X) = 0 (assumed) Prob > chi2 = 0.0000
(Std. Err. adjusted for 4,404 clusters in i)
-----------------------------------------------------------------------------------------
| Robust
LogSales | Coef. Std. Err. z P>|z| [95% Conf. Interval]
------------------------+----------------------------------------------------------------
dum_ICT | .5432373 .2749938 1.98 0.048 .0042594 1.082215
Year2 | -.1868714 .0473769 -3.94 0.000 -.2797284 -.0940144
LogFirmSize | 1.089397 .0223518 48.74 0.000 1.045588 1.133206
c6 | .2488145 .0614796 4.05 0.000 .1283166 .3693123
|
c.dum_ICT#c.Year2 | .4444767 .1238044 3.59 0.000 .2018246 .6871288
|
c.dum_ICT#c.LogFirmSize | -.1248695 .0388428 -3.21 0.001 -.2010001 -.0487389
|
c.dum_ICT#c.c6 | -.36005 .1789319 -2.01 0.044 -.71075 -.00935
|
LogFirmAge | .3055828 .0500255 6.11 0.000 .2075346 .403631
b2b | .0089473 .0007782 11.50 0.000 .0074221 .0104724
|
Cid |
11 | .7668476 .1964145 3.90 0.000 .3818822 1.151813
12 | -3.297935 .1730777 -19.05 0.000 -3.637161 -2.958709
13 | .7270781 .2315544 3.14 0.002 .2732398 1.180916
14 | -.6149425 .2143766 -2.87 0.004 -1.035113 -.194772
15 | .6948599 .1602769 4.34 0.000 .3807231 1.008997
16 | .9412395 .2486655 3.79 0.000 .4538641 1.428615
17 | .2757622 .1949146 1.41 0.157 -.1062633 .6577877
18 | .5553843 .1906491 2.91 0.004 .181719 .9290497
19 | -2.40611 .1583451 -15.20 0.000 -2.716461 -2.09576
20 | -.7922745 .3916108 -2.02 0.043 -1.559818 -.0247314
21 | -.8017934 .1666927 -4.81 0.000 -1.128505 -.4750817
22 | -3.343957 .2024582 -16.52 0.000 -3.740768 -2.947146
23 | -4.023811 .2263285 -17.78 0.000 -4.467406 -3.580215
24 | -.6255861 .1905041 -3.28 0.001 -.9989673 -.2522049
25 | .2832945 .1639983 1.73 0.084 -.0381362 .6047252
26 | 1.811988 .24045 7.54 0.000 1.340715 2.283262
27 | -1.585737 .1457486 -10.88 0.000 -1.871399 -1.300075
28 | 1.20013 .2273049 5.28 0.000 .7546209 1.64564
29 | .5454183 .1566247 3.48 0.000 .2384396 .8523971
30 | 1.615417 .1921696 8.41 0.000 1.238772 1.992063
31 | -2.024318 .165459 -12.23 0.000 -2.348612 -1.700024
32 | 1.527866 .1624043 9.41 0.000 1.209559 1.846173
33 | .7318168 .2407154 3.04 0.002 .2600232 1.20361
34 | 1.493808 .165864 9.01 0.000 1.168721 1.818896
35 | 2.884055 .1547119 18.64 0.000 2.580825 3.187285
36 | -4.552385 .1591759 -28.60 0.000 -4.864364 -4.240406
|
_cons | 13.48519 .200877 67.13 0.000 13.09147 13.8789
------------------------+----------------------------------------------------------------
sigma_u | 0
sigma_e | 1.7565325
rho | 0 (fraction of variance due to u_i)
-----------------------------------------------------------------------------------------
I would really appreciate if you can tell me if this is right. Thanks a lot!
Kind regards
Dominik
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