Hi everyone,
I was just wondering if anyone could explain the difference between using an OLS regression and using a fixed effects model. I believe that the fixed effects model is used for Panel data, but you can also run an OLS regression on Panel data. Sorry if I am incorrect but it would be greatly appreciated if someone can clear this up.
The two codes I am using to compare models are:
/////OLS
reg lsp esgscore qr ltdp ebit roe
////////Fixed-effects model
xtreg lsp esgscore qr ltdp ebit roe
Where:
lsp = Log of the stock price
esgscore = esgscore
qr = quick ratio
ltdp = Long term debt percentage of capital
ebit = earnings before interest and taxes
roe = return on equity
Also what is the difference of using the random effects model and a fixed effects model for panel data?
Any help would be greatly appreciated!
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