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Why the researchers add controls variables in Panel Data regression?
Why the researchers add controls variables in Panel Data regression?

Dear Statalist,

I am wondering about the reasons behind adding more control variables in the panel regression?

For example , I want to investigate the impact of oil price shocks on trade balance using panel technique

My dependent variable: Trade balances
Explanatory variable: Oil price

Control variable 1: real growth of domestic product (RGDP)
Control variable 2: Real exchange rate (RER)

I found also some researchers add more control variables in the panel regression ?

Please any help statistically intuitions of why using the control variables beside the independent variables?

Thanks in Advance
Saberia
Greece

BJ Data Tech Solution

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Why the researchers add controls variables in Panel Data regression?

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