How many dummy variables can I use
Posted: Fri Aug 29, 2014 4:13 pm
Hi, I'm working on my first econometrics project. My topic is on the impact of foreign direct investment on economic growth (as GDP). Panel data analysis, 10 countries, and 20 years. When I got my proposal's feedback, my professor suggested that I include dummy variables. He wrote: country dummies 9, and year dummies 19. My question is: can I include BOTH dummies? I asked another professor, and he told me that I could only use one dummy, that I couldnt' include both of them. Please and answer will be highly appreciated.
Thank you!
Thank you!