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Re: st:about the fixed-effects model

From   "Jing Zhou" <>
To   <>
Subject   Re: st:about the fixed-effects model
Date   Tue, 31 Aug 2010 19:25:24 +1000

Dear Maarten,

Thanks for your suggestion. I have checked my dataset showing there is no change of province for this variable. I am wondering whether it is because my dataset is an unbalanced panel?


>>> Maarten buis <> 31/08/2010 6:56 pm >>>
--- On Tue, 31/8/10, Jing Zhou wrote:
> My dataset comprises firms observed over time. the time-
> invariant variable is computed at the province level. Can
> I use the FE model to estimate this time-invariant 
> variable? 

That suggests to me that there are firms that changed
province. A variable may be constant within a province, but
when the firm changes province, that variable is no longer
time constant from the perspective of the firm. The latter
is what matters for fixed effects regression. If this change
of province is real, then that is the solution of your

Hope this helps,

Maarten L. Buis
Institut fuer Soziologie
Universitaet Tuebingen
Wilhelmstrasse 36
72074 Tuebingen


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