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
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