Query regarding panel data model

[Nehaa Guptaa]

I have constructed a panel dataset that includes three years before an M&A event, the year of the M&A, and three years after, covering 1,000 M&A events from 2009 to 2020. This results in seven years of data for each M&A identifier. I have also included a set of control variables, say 10, so I have total observations = 7*1000*10 = 70,000. To assess the impact of M&A on a dependent variable (say ROA), I introduced a dummy variable (POSTM&A) that takes the value of 1 for all years following the M&A and 0 for the years preceding it. After running OLS regression, if this dummy variable shows a positive coefficient, can we conclude that ROA levels are higher in the post-M&A period compared to the pre-M&A period? Is there any inherent issues with this model that I might have overlooked? Please advise.

[Carlo Lazzaro]

Nehaa:
what you overlooked is that you should consider -xtreg,fe- and not OLS for your research.
In addition, please read teh FAQ on how to post more effectively. Thanks.

[Nehaa Guptaa]

Thanks for the reply. I did use xtreg command. I just wanted to ensure that I am interpreting the coefficient of the dummy variable "POSTM&A" in the correct way.

[Carlo Lazzaro]

Nehaa:
it might be, but to get more helpful replies, you should share what you typed and what Stata gave you back (as per FAQ).