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  • Control for country if origin in panel data

    I have two countries and different companies in those countries. I try to run a panel data regression analysis after declaring my data panel data. I use this command so far: xtreg dependent variable independent variable, fe after I checked with the Hausmann test.
    However, I now got the task to control also for country of origin. And I thought that I could just give one country the dummy variable 0 and the other one 1, but when I then try to run the regression using
    xtreg , dependent variable independent variable control variables dummy variables, fe

    it says omitted for the dummy variable part.

    Any idea how I can control for my country of origin?

  • #2
    Jodie:
    it makes sense according to the -fe- working logic, as long as -i.country- is, in all likelihood, a time-invariant predictor.
    Kind regards,
    Carlo
    (Stata 19.0)

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    • #3
      But why does it say 0 (omitted) for the results then? So how can I really control for country of origin?

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      • #4
        Jodie:
        as the country of origin is time-invariant, the -fe- wipes ot out.
        Kind regards,
        Carlo
        (Stata 19.0)

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