Dear experts,
currently I am working on a project in which we evaluate firm-specific resources towards their effect on firm performance. Therefore, we regress a set of covariates (education, experience, etc.) against the business’s growth rate of employees. In other words, we would like to find variables which are positively linked to a firms employment growth. We do so by using simple OLS.
In addition, we include a binary dummy variable indicating whether the firm received funding from a venture firm. Venture firms are believed to not only invest money, but also expertise. Yet, we believe this venture financing is endogenous to firm size due to unobserved firm heterogeneity and/or reverse causality. Thus, simply using OLS will lead to biased estimates when we include the VC-dummy into our regression.
My ultimate research outcome should be an answer to the question: What direct effect for example education has on the firms employment growth rate an to what extent (indirect effect) the venture financing has in case the firm was able to acquire such.
Can you recommend a concept or model that I can apply in Stata in order to “evaluate” the change in effect-size for example education has on the firm`s employment growth once I include the endogenous venture capital dummy? My current database consists of only 90 sample firms for which I have employment data for only the time of the survey as well as the time the firm was founded. Thus, I do not have a real panel dataset.
I would much appreciate your thoughts and/or ideas!
Thanks in advance,
Alex
currently I am working on a project in which we evaluate firm-specific resources towards their effect on firm performance. Therefore, we regress a set of covariates (education, experience, etc.) against the business’s growth rate of employees. In other words, we would like to find variables which are positively linked to a firms employment growth. We do so by using simple OLS.
In addition, we include a binary dummy variable indicating whether the firm received funding from a venture firm. Venture firms are believed to not only invest money, but also expertise. Yet, we believe this venture financing is endogenous to firm size due to unobserved firm heterogeneity and/or reverse causality. Thus, simply using OLS will lead to biased estimates when we include the VC-dummy into our regression.
My ultimate research outcome should be an answer to the question: What direct effect for example education has on the firms employment growth rate an to what extent (indirect effect) the venture financing has in case the firm was able to acquire such.
Can you recommend a concept or model that I can apply in Stata in order to “evaluate” the change in effect-size for example education has on the firm`s employment growth once I include the endogenous venture capital dummy? My current database consists of only 90 sample firms for which I have employment data for only the time of the survey as well as the time the firm was founded. Thus, I do not have a real panel dataset.
I would much appreciate your thoughts and/or ideas!
Thanks in advance,
Alex
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