Wednesday, January 29, 2020

Panel Data, one year dummy variable omitted because of collinearity

Hi everybody,

I'm using panel data to examine the effect of CEO age on tone and readability of annual reports for 5 years. I have used fixed effect and random effect. I am including year as dummies, however Stata is omitting year-dummy 2013 because of collinearity which make the total number of observations low. I am using the command:

local RHS1 "ceoage "
*/

local controls "liquidityratio netincome firmsize PriceToBookValue boardsize firmage"

foreach depvar in tone readability {
forval i = 1/1 {
xi: xtreg `depvar' `RHS`i'' i.year, re robust


Any help would be hugely appreciated.

Yours Sincerely,

dan billy

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