Hello!

I have conducted a staggered DID where different firms' events happen in different years. For each firm, due to data limitations, I only obtain the event year and the year before. My DID includes TREAT, POST dummies and the interaction, TREAT*POST. The ols model includes industry and year FEs and standard errors are clustered at the industry level.

I have read some papers on how to conduct parallel trend test, however, they would typically have several pre and post years, so I can create pre3, pre2, pre1, post1, post 2 etc (relative to the event year, year 0), put those dummies into the regression, and expect the pre dummies to be indistinguishable from 0, and the post dummies to be significantly different from 0. For my DID, the situation is a bit different, I don't know how to test for that only 1 pre year. In talking about trend, I suppose there should be at least 2 years of pre. Any suggestion on how to test the parallel trend assumption? Thanks!