Hello everyone,
I am running a 2SLS regression: Y = β1X+β2firm_controls+β3country_controls+ϵ. So, my first stage is X = γ1Z+γ2firm_controls+γ3country_controls+ω. But I want my first stage being like X = γ1Z+γ3country_controls+ω. without using firm control variables because X is a country-level variable.
If I run following code in Stata, it usually uses firm controls to estimate the first stage. How can I modify my code to get the result I want?
Regards,
Arnold
I am running a 2SLS regression: Y = β1X+β2firm_controls+β3country_controls+ϵ. So, my first stage is X = γ1Z+γ2firm_controls+γ3country_controls+ω. But I want my first stage being like X = γ1Z+γ3country_controls+ω. without using firm control variables because X is a country-level variable.
If I run following code in Stata, it usually uses firm controls to estimate the first stage. How can I modify my code to get the result I want?
Code:
ivregress 2sls Y firm_control country_control (X = Z)
Arnold
