please note that this question was cross-posted on StackExchange but didn't receive any feedback so I hope I might have better luck here. Link
My dependent variable is a count variable that takes on the value 0 in most cases (80%) so I am applying a Negative binomial regression model. Depending on the exact model specification my independent variable of interest is significant at 5% or 1%. My model has a total of 16 predictor variables and no interaction term included. It has year and industry-fixed effects. Each observation corresponds to a Merger & Acquisition announced by US companies on some day between 2009 and 2018. For each observation (i.e., each deal) my dependent variable measures the number of press releases the acquiring company has published from one day before to one day after the acquisition was announced. So ultimately my mode examines what determines the number of press releases published by an acquiring firm around the date on which the firm announced an M&A. Most papers I read so far take the natural log of a control variable that I also included in my model (market value of a company). This makes sense to me as the variable usually is skewed to the right. The non-transformed version of the variable is highly significant (1%) and doesn't do much to my independent variable of interest in terms of significance. However, if I include the logged version of the control my independent variable get's highly insignificant. I am not trying to push my data towards significance but want to understand if this could be an absolutely normal thing or indicates some sort of problem.
Please find below the current Stata output of my model. To improve readability I left out the estimates for the fixed effects dummies. CNS is my variable of interest that gets highly insignificant when the variable Acq_Size_MV42 is logged.
Code:
Negative binomial regression Number of obs = 888 Wald chi2(34) = . Dispersion: mean Prob > chi2 = . Log pseudolikelihood = -575.33319 Pseudo R2 = 0.0926 -------------------------------------------------------------------------------------------------------------------------------------------- | Robust IM_Offsetting | Coefficient std. err. z P>|z| [95% conf. interval] ---------------------------------------------------------------------------+---------------------------------------------------------------- CEO_tenure | .0263472 .0138861 1.90 0.058 -.0008691 .0535635 CEO_Age | .020686 .0121678 1.70 0.089 -.0031625 .0445345 CEO_Gender | -.4555254 .3685265 -1.24 0.216 -1.177824 .2667733 Acq_MA_exp | -.0125482 .0219201 -0.57 0.567 -.0555109 .0304145 Deal_Value | -6.53e-11 2.88e-11 -2.27 0.023 -1.22e-10 -8.98e-12 Deal_AllCash | -.2488855 .2840594 -0.88 0.381 -.8056317 .3078607 Deal_Stock | .1827599 .3102503 0.59 0.556 -.4253195 .7908392 Targ_Listing | .0517394 .0560832 0.92 0.356 -.0581817 .1616604 FF12_Div | .42329 .1428464 2.96 0.003 .1433162 .7032638 Acq_Size_MV42 | 8.30e-12 2.08e-12 4.00 0.000 4.23e-12 1.24e-11 Acq_Lev_WWU | .0271976 .0346693 0.78 0.433 -.0407529 .0951482 Acq_TobinsQ_WWU | .1080321 .0686858 1.57 0.116 -.0265896 .2426537 Acq_FCF | 3.453921 1.930733 1.79 0.074 -.3302461 7.238087 Acq_Cash_hold | .154336 .5424386 0.28 0.776 -.9088242 1.217496 Acq_ROA | -4.144292 1.860108 -2.23 0.026 -7.790036 -.498547 CNS | .2598483 .1100374 2.36 0.018 .044179 .4755176 ---------------------------------------------------------------------------+---------------------------------------------------------------- /lnalpha | -.7465692 .4326131 -1.594475 .1013369 ---------------------------------------------------------------------------+---------------------------------------------------------------- alpha | .4739899 .2050543 .203015 1.106649 --------------------------------------------------------------------------------------------------------------------------------------------
Code:
. sum IM_Offsetting if sample == 1 Variable | Obs Mean Std. dev. Min Max -------------+--------------------------------------------------------- IM_Offsett~g | 888 .3085586 .6643227 0 4
0 Response to Negative binomial regression: Coefficient gets insignificant when control variable is logged
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