Dear Stata Experts,

In one of my project, the dependent variable (DV) is country level corruption score (country_corrupt), and the independent variable (IV) is firm level corruption (gift). That means a country’s corruption score is predicted by the firm-level corruption. I have 950 observations from 42 countries for only one year. The regression equation is:

Country_corrupt = β0 + β1*gift +β2* Firm-level control variables

Here, 42 different values of dependent variable, and 950 different values of independent variable i.e., the value of dependent variable is same for all firms in a given country. This regression model is like Micro-Macro linkage i.e., macro level DV and micro level IV.

I have run the regression using OLS and the model runs perfectly.

My question is that “econometrically is it meaningful”? If I run the model using OLS, is it fine or I should use any other estimation method?

Can you please help me giving your valuable opinion?

Best regards,

Sushmita