R Squared Low

[Tat0em]

Hello,

I have a question about my r squared.
I have been running Panel OLS regressions, my coefficient is significant however I have a R-squared value which is really low. I have a dummy variable TBTF as dependent variable
and my independent variable is RWAG11, this is the change of ratio per year (standardized). I imported my data as panel data into eviews. I trying to find out in the TBTF is moving into
more rwag11 over time (maybe I need to do a different test?) In my sample there are 48 companies and per company I have 6 years.
I hope anyone somebody have an idea what I am doing wrong or how I can get my r squared higher. I tried fixed period effects but this didnt worked, neither did fixed cross-section effects.

My regression output:

Dependent Variable: DTBTF
Method: Panel Least Squares
Date: 11/19/13 Time: 15:27
Sample: 2007 2012
Periods included: 6
Cross-sections included: 45
Total panel (unbalanced) observations: 253

Variable Coefficient Std. Error t-Statistic Prob.

C 0.553360 0.030974 17.86545 0.0000
RWAG11 0.079847 0.031035 2.572780 0.0107

R-squared 0.025694 Mean dependent var 0.553360
Adjusted R-squared 0.021812 S.D. dependent var 0.498130
S.E. of regression 0.492667 Akaike info criterion 1.429909
Sum squared resid 60.92302 Schwarz criterion 1.457841
Log likelihood -178.8835 Hannan-Quinn criter. 1.441147
F-statistic 6.619196 Durbin-Watson stat 0.008388
Prob(F-statistic) 0.010664

Thanks in advance!

[eobumneke]

This is a case of a spurious regression result! You need to run a unit root test on each of your variables before carrying out any further diagonistic test and regression