Good Afternon everyone,
I am writing this post in order to receive some help with the verification of parallel trends assumption. The analysis I am conducting concerns the effect of the implementation of a CSR non-financial disclosure policy in Europe on Agency Costs of firms. Following some of the previous posts, I launched the following command on STATA:
preserve
collapse (mean) AgencyCost_w, by(CSR YEAR)
reshape wide AgencyCost_w, i(YEAR) j(CSR)
graph twoway connect AgencyCost_w* YEAR if YEAR < 2017
restore
the problem is that I only get one trend line, more in particular just the line for the non-treated group. CSR it's a dummy variable which equals 1 when a company is forced to prepare a CSR non financial report while equals 0 when a company is not forced to prepare the disclosure; AgencyCost it's the dependent variable. Of course I even have some control variables.
How can I solve the problem?
Thanks a lot for the answers!
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