Dear Specialist,
As I have read from the literature review, some scholars have run OLS model when Y (dependent variable) is calculated from one of independent variable (X1 in the model). In my case, I run panel data model with form: Yit= a0 + b0*X1it+ b1*X2it+ b2*X3it+...
I have a few questions that I was hoping you might be able to help me with.
1) Can I run a panel data model when variable Y (dependent variable) is computed from independent variable in the model (for example X1)?
2) In my model, I want to add a dummy variable that represents the year event (such as the crisis in 2008), that takes values of 0 and 1 and are time invariant
3) I also wanted to include industry dummies to control for effects in different industries. Is my only solution to apply a random effects model?
Thank you in advance, I really appreciate your help.