Hello! I am uncertain on how to measure the right thing for the paper I'm writing.
I am researching the effects government institutions have on country-prevalence of social entrepreneurship (reported as % of total entrepreneurs per country). My earlier two hypotheses suggest that govsize (government spending as % of GDP) has a negative relationship with social entrepreneurship and that govqual (government quality stated in values between -2.5 to 2.5) has a positive relationship with social entrepreneurship.
My new hypothesis is as follows: a relatively smaller government size and relatively higher government quality is the most beneficial for social entrepreneurial activity.
So, I want to find the coefficient for my IV when government size is getting lower and government quality is getting higher.
What have I tried so far?
I made an 'inverted' version of the government variable (= 100 - govsize) and let it interact with government quality as follows. (SE_ALL1 is prevalence of social entrepreneurship)
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I also made a categorical variable of government size (1 = smallest 25% of governments, 2 = 25-50% etc.) but some results are omitted which would be vital to my findings.
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Any help would be greatly appreciated, thanks in advance
Daan
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