hello,
Please guide me about this comment.
I am using agency cost measure as dependent variable (selling plus admin expenses over sales). I have received a comment from a journal as;
"I am sure that the agency cost varies significantly across industries. For example, the agency cost in the financial industry is certainly different from that in the construction industry or the high-tech industry. As such, I recommend that the authors compute an industry-adjusted agency cost measure for each firm. Specifically, the industry average of the agency cost proxy should be deducted from that agency cost proxy of each firm-year that operates in that industry. The firm-year should be excluded from the computation of the industry average (i.e., exclude the focal firm-year). This test can be performed on the main analysis and reported in an appendix"
How to address this comment Please guide me.. And how to compute industry average of agency cost measure?
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