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  • Negative binomial and time trend

    Dear all,

    I am working on regressing patents on a series of variable using Stata. To this end I am using both xtpoisson and xtnbreg. In the process of the analysis of the results, I am now considering if I should add time dummies or a time trend. On this regard, I have two questions:

    1) What is the best approach to understand if time dummies or a time trend should be inserted?
    2) What is the most effective procedure to insert them in the xt regression? Below there is my attempt

    *** time dummies
    xtpoisson f1.patents regulation competition $control i.year, fe
    xtnbreg f1.patents regulation competition $control i.year, fe


    ***** Time trend
    gen ttrend=0
    forvalues i=1/10 { /*if these are the years for the sample*/
    replace ttrend=`i' if year==1999+`i'
    }
    *
    xtpoisson f1.patents regulation competition $control ttrend, fe
    xtnbreg f1.patents regulation competition $control ttrend, fe

    Thanks a lot for any suggestions you might have.

    Best Regards
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