Threshold, Marginal and Interactive Effects Among Economic Variables: an Integrated Panel Data Framework

Zehra Yalniz; Figen  Büyükakin

doi:10.63356/ace.2026.007

Authors

Zehra Yalniz Independent Researcher, Körfez, Kocaeli https://orcid.org/0000-0003-2633-2022
Figen Büyükakin Faculty of Political Sciences, Department of Economics, Kocaeli University, İzmit https://orcid.org/0000-0002-0226-7265

DOI:

https://doi.org/10.63356/ace.2026.007

Keywords:

interactive panel data model, panel data analysis, marginal effects, fixed effects, random effects

Abstract

This paper develops an integrated empirical workflow, referred to as the Interactive Panel Data Framework (IPDF), that systematically combines established panel data methods, such as interaction terms, threshold analysis, and marginal effect computation, within a unified estimation and inference strategy. Rather than proposing a new estimator, the IPDF provides a coherent analytical protocol for jointly evaluating regime-dependent, interaction-driven relationships in macro-panel setting. Using a balanced panel of emerging economies over the period 1980–2023, the study combines interaction terms, dynamic specifications, and nonlinear mechanisms within a unified empirical structure. Monte Carlo simulations and empirical estimations support the robustness of the proposed framework, while homogeneity tests and threshold analysis reveal substantial country-specific heterogeneity. The empirical results indicate statistically significant threshold and conditional marginal effects, showing that the impact of inflation and exchange rates on economic growth varies across regimes and economic conditions. Moreover, the identified interaction effects highlight the importance of jointly evaluating macroeconomic policy variables rather than analysing them in isolation. By integrating interaction effects, marginal responses, and threshold dynamics within a single panel data framework, this study contributes a coherent and policy-relevant empirical approach for analysing nonlinear and regime-dependent macroeconomic relationships in emerging economies.

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