Hello, I am wondering the description on the probit model with firm-level random effects and time fixed effects.
xtprobit Y X1 X2 X3 i.Year, re
This is the command I used.
According to many text books, I understand it is not possible to use fixed effects specification for non-linear models like probit model.
Thus, I use RE with the year dummies.
But some articles say "the model includes firm level random effects. it also includes time fixed effects to control for global common shocks."
So my question is that the year dummies (i.Year) is whether the correct way to omit the "unobserved variant time effects happened across firms" in non-linear model and whether this can be said "it includes time fixed-effects."
Your any answers would be much helpful for me. I appreciate you in advance.
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