I came across the following in an article that confused me.
Figure 1 shows the heterogeneity of combinations of technological and product market overlap between the alliance partners in our dataset.
FIGURE 1 Heterogeneity of alliance partners across technological and product market overlap
Note: The plot displays combinations of values between one standard deviation below and one standard deviation above the mean. The dashed line displays the respective mean values.
I would like to know how to get these points in Figure 1. For example, I have two variables A and B. I think I need to do the following. First I need to calculate the standard deviation and mean of the two variables separately, then calculate the mean of A plus one standard deviation and minus one standard deviation to obtain a1 and a2, and do the same to obtain b1 and b2, then gradually filter out A and B that are in the range of [a1,a2] and [b1,b2], and then make Figure 1 based on these data. I am not sure if there are any mistakes in my idea and would like to get your guidance.
Also, how does the heterogeneity manifest in Figure 1? Can someone provide some learning material?
i have added new stata code example as following.
is keep if to <toab & to>tobe keep if pmo <pmoab & pmo>pmobe right?
clear
quie set obs 215
set seed 2022
gen tom = 0.450
gen tosd = 0.220
gen pmom=0.160
gen pmosd=0.10
gen toab = tom+tosd // one standard deviation above the mean
gen tobe = tom-tosd //one standard deviation below the mean
gen pmoab = pmom+pmosd // one standard deviation above the mean
gen pmobe = pmom-pmosd //one standard deviation below the mean
gen to=rnormal(tom,tosd)
gen pmo=rnormal(pmom,pmosd)
keep if to <toab & to>tobe //Is this correct?
keep if pmo <pmoab & pmo>pmobe //Is this correct?
twoway (scatter pmo to) , xline(0.45) yline(0.16) ///
ytitle("Product market overlap") ///
xtitle("Technological overlap") ///
xlabel(, format(%12.2f)) ylabel(, format(%12.2f))