EXAMPLE:
Let me explain my research question first: I want to test whether the female directors who have relatives as officer in the firm would affect firm performance.
In my first regression equation, I have added independent variables about the percentage of female directors(A), the number of female directors who have relatives as officer(B), and some control variables. Dependent variable is Tobin's Q. It turns out that the number of female directors who have relatives as officer is significant.
However, when I add the interaction(AB) consists of the percentage of female directors and the number of female directors who have relatives as officer in second regression equation, other variables are the same as the first equation.
The number of female directors who have relatives become insignificant.
The joint significance test of AB and B, P- value of the test is 0. Therefore, the interaction cannot be deleted.
Then I use center technique.
After centering, the interaction(AB) and variable the number of female directors who have relatives as officer(B) are not significant.
How can I explain it?
Could anyone help me?
Thank you very much!