Hey Statalists,

I am currently building a panel data set to analyse the effect of the amount of available venture capital funds on the amount of newly created firms (more precisely, the firms with a specific size). I am looking on different regions in different years, thus I need - to my current knowledge - a panel regression with state and year-fixed effects. I also have GDP as a control.

My stata line looks like this:

If I proceed as mentioned, will I be able to see the direct effect of e.g. vc_funds on log_firm (number of firms)? I recently red that in case of state-year-fixed-effects this interpretation is flawed because the direct effect is captured by the fixed-effects? I am a bit confused here, and open for any further comments.

Your help is highly appreciated

Best

Korhan

I am currently building a panel data set to analyse the effect of the amount of available venture capital funds on the amount of newly created firms (more precisely, the firms with a specific size). I am looking on different regions in different years, thus I need - to my current knowledge - a panel regression with state and year-fixed effects. I also have GDP as a control.

My stata line looks like this:

Code:

xtset state year xtreg log_firm vc_funds GDP i.year, fe

Your help is highly appreciated

Best

Korhan

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