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From |
Xiang Ao <xao@hbs.edu> |

To |
"statalist@hsphsun2.harvard.edu" <statalist@hsphsun2.harvard.edu> |

Subject |
Re: st: an estimation method question |

Date |
Wed, 17 Mar 2010 11:17:51 -0400 |

Hi Maarten,

Xiang Maarten buis wrote:

--- On Tue, 16/3/10, Xiang Ao wrote:There are different numbers of founders for each firm.The smallest number is 2, it can be as many as 10co-founders. As far as I understand, the number of categories need to be fixed in the methods youmentioned.That is right, but more importantly the categories need to have the same meaning across observations. For exampleimangine we are looking at the proprotion of spending ina firm on labour and capital (I am no business economistso forgive me if this doesn't make substantive sense).Across firms the proportion spent on labour has (sorta)the same meaning. The aim of such an analysis is to findvariables that make some firms spend more on labour andothers more on capital goods.I find it harder to come up with something similar forthe different founders. Who would fall in the firstcategory, who in the second, etc. (alphabetical order?).A solution would depend on what your unit of analysisis for your study, i.e. who do you want to study: thefirms or their founders.If you want to study the firms, than I could imaginethat you are interested in explaining differences inthe "structure" of ownership. I would than try tooperationalize that in one number per firm and use anappropriate regression like command to analyse that.For example, I could imagine someone interested in theshare of the largest founder as a measure ofconcentration of ownership, in which case I would usethe -glm- trick or -betafit- (zero or one proportionsare no problem there as you stated that the minimumnumber of founders in your dataset is 2). Alternatively,you could try other summaries of the concentration ofownership like entropy. Don't take my reference toentropy too literaly, I only know that there are manysuch measure, and entropy was the only one I could remember. If you want to study founders, I would for now forget about the constaint that the proportions should addup to one, and transform the data to a panel datasetwhere the observations are founders nested in firms.I would than try -xtgee- to model these proportions,just like the -glm- trick. It will be a populationaveraged model, so no individual level effects,which seems to be considered a problem in economics.However, it would be a good place to start. Hope this helps, Maarten -------------------------- Maarten L. Buis Institut fuer Soziologie Universitaet Tuebingen Wilhelmstrasse 36 72074 Tuebingen Germany http://www.maartenbuis.nl --------------------------* * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

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**Follow-Ups**:**Re: st: an estimation method question***From:*Maarten buis <maartenbuis@yahoo.co.uk>

**References**:**Re: st: an estimation method question***From:*Maarten buis <maartenbuis@yahoo.co.uk>

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