Dear all

I have the following problem that I hope to find help with:

My data structure is as follows, with employee-employer links over several years:
y j i yj xj xi
1 1 1 a x f
1 1 2 a x g
1 1 3 a x h
2 1 1 b y f
2 1 2 b y g
2 1 3 b y h
1 2 4 c z l
1 2 5 c z j
1 2 6 c z n
2 2 1 d xy f
2 2 4 d xy I
2 2 5 d xy j
Where, i=individuals, j=firms, y=year, yj = y-values on the j-level (continous variable), xj = x-values

My aim:
To explain an y-variable on the j-level (firm-level), for example profitability, from both j-level explanatory variables (for example debt) and individual characteristics (for example gender), to investigate the influence of individuals on firm outcomes.

My problems:
* How do i explain the yj variable, when it's on a higher level than the explanatory variables? For example, for firm j in y 1: the yj (dependent variable) is repeated three times...
* Individuals (i) are nested within firms (j) - but they can also move between firms! For example, in my example above individual 1 moves from firm (j) 1 in year (y) 1 to firm (j) 2 in year (y) 2.
* How do I incorporate into the model the fact that employees are ranked within the firm-year? Within each firm-year I rank employees according to salary, assuming that the highest paid employees have most influence on firm outcomes.

I am looking forward to your valuable inputs!

Best,
Morten Jensen