Hello, I examine the Determinants of Banking Profitability. I have 3 Dependent variables that will be examined separately. I have Bank specific, industry-specific and macroeconomic variables.
Dependent are ratio numbers all the others are in percentages and I got 2 dummies of 0,1. My dataset is Panel I have N=118 and T=20. There are missing values in this dataset.However when i xtset the panel it says that it is strongly balanced.
I got in total 32-33 variables excluding Bankname, year and ID.
So I have started with normal regression and i did various tests. In particular, I got these results:
1)Heteroscedasticity present --> so I need robust
2)Omitted variables-->biased OLS -->fixed effects
3)Model specification through linktest-->not correctly specified
4)Multicollinearity-->present through CorrMatrix and VIF--->fixed
5) Normality-->not present through Shapiro Wilk
6)Breusch and Pagan Lagrangian multiplier test -->random
7)hausman---> FE
8) time effects through testparm-->needed
9) i cannot test cross-sectional dependence with pesaran nor xttest2
9)GroupWise heteroscedasticity--> present
9) autocorrelation through xtserial--> present
So my question 1) is which model should i run just xtreg y x1, fe vce(robust) or xtreg y x1 i.year i.id, fe vce(robust)
2) if anyone know how i can write the syntax for One step system GMM for my variables?
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