Hi all,
I am analyzing panel data in Stata for my masterthesis, and I have some questions about the data and the commands. I have a dataset of approx. 5000 firms for 15 years, annual data. One important thing is that one of the explanatory is not cross sectionally varying. It is the same for every firm in the same year.
At first I thought time fixed effects are not possible with a cross sectional invaryant variable but my supervisor tells me it is, I think I figured out how, but I am not completely sure. Normally I use Eviews that's why I am not very experienced with using stata.
I started with the panel setting xtset firmid year, than I tried to estimate the model with this:
xtreg y x1 x2 xn, fe
Is is true that this command is for unit/cross sectional fixed effects? And that time fixed effects can be estimated with this:
xtreg y x1 x2 xn i.year
If i use this, I receive the following note: 2016.year omitted because of collinearity, can anyone tell me why this is the case? If thougt because of a potential dummy trap when a dummy is included for every year?
I hope someone can help me,
Thank you
I am analyzing panel data in Stata for my masterthesis, and I have some questions about the data and the commands. I have a dataset of approx. 5000 firms for 15 years, annual data. One important thing is that one of the explanatory is not cross sectionally varying. It is the same for every firm in the same year.
At first I thought time fixed effects are not possible with a cross sectional invaryant variable but my supervisor tells me it is, I think I figured out how, but I am not completely sure. Normally I use Eviews that's why I am not very experienced with using stata.
I started with the panel setting xtset firmid year, than I tried to estimate the model with this:
xtreg y x1 x2 xn, fe
Is is true that this command is for unit/cross sectional fixed effects? And that time fixed effects can be estimated with this:
xtreg y x1 x2 xn i.year
If i use this, I receive the following note: 2016.year omitted because of collinearity, can anyone tell me why this is the case? If thougt because of a potential dummy trap when a dummy is included for every year?
I hope someone can help me,
Thank you
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