Hi everybody,

I am working on a fixed-effects model for my master thesis and facing a problem regarding the transformation of different introduced variables. Hopefully somebody can give me a hand.

One of my control variables (Cash Flow) also takes on negative values. Other control variables such as Expenditures can only be positive or zero. I would like to transform at least the Expenditure-variables into logs. In my opinion it makes no sense to also transform Cash Flow (due to the negative values). Is it appropriate to transform just a part of my regressors and to leave other arithmetically?

Thank you for your help.

Best regards

Alessio

I am working on a fixed-effects model for my master thesis and facing a problem regarding the transformation of different introduced variables. Hopefully somebody can give me a hand.

One of my control variables (Cash Flow) also takes on negative values. Other control variables such as Expenditures can only be positive or zero. I would like to transform at least the Expenditure-variables into logs. In my opinion it makes no sense to also transform Cash Flow (due to the negative values). Is it appropriate to transform just a part of my regressors and to leave other arithmetically?

Thank you for your help.

Best regards

Alessio

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