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st: Fixed effects

From   "Reddy, Colin" <>
To   "" <>
Subject   st: Fixed effects
Date   Wed, 20 Jul 2011 11:14:16 +0000

Dear Listers

I am new to this and not trained in econometrics. I have a model of fairly time invariant issues viz. economic development and institutions. The dependent variable is enterprise activity. I have 8 years of country data. Some interaction effects in my pooled model recently turned insignificant after I added fixed effects.

I was wondering if I will be "double counting" if I control for fixed effects through country dummies. My gut says that my concern is illogical...since the IVs are still kept in the model equation in addition to the dummies...
If it is possible that country dummies "double count" my already static IVs then perhaps I can return to the pooled model or try random effects? Will appreciate some comments.



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