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st: Centering of continuous interaction term in fixed effect model.


From   natasha agarwal <agarwana2@googlemail.com>
To   statalist@hsphsun2.harvard.edu
Subject   st: Centering of continuous interaction term in fixed effect model.
Date   Sat, 11 Sep 2010 09:52:50 +0100

Dear Statalist,

I was estimating an augmented Cobb-Douglas Production function using a
fixed effect estimator. the estimating equation looks like:

lnVA=lnK+Lnl+lnFDI+lnGDP+lnGDP^2+lnFDI*lnGDP+lnFDI*(lnGDP^2)

There is high multicollinearlity and am aware of that.

My question is whether you center the data even when the fixed effect
does it for you.

Thanks
Natasha
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