Industry effects - panel data
Posted: Mon Apr 07, 2014 5:45 am
Hi everybody,
I'm currently working with an panel data model and I want to investigate/control industry effects. My first plan was to do this by creating dummy variables, but apparently this isn't possible because you can only include time-varying regressors in the model. Since firms usually belong to one industry the dummy variable for industry does not vary with time.
I wonder if someone knows another method to controle these industry effects?
Thanks!
I'm currently working with an panel data model and I want to investigate/control industry effects. My first plan was to do this by creating dummy variables, but apparently this isn't possible because you can only include time-varying regressors in the model. Since firms usually belong to one industry the dummy variable for industry does not vary with time.
I wonder if someone knows another method to controle these industry effects?
Thanks!