[Neha Kanojia]

Dear Joao Santos Silva
can we apply ppmlhdfe with net FDI inflows( where some values are NEGATIVE ) as dependent variable ?

Best Regards
Neha

[Joao Santos Silva]

I do not think the command works in that case, but I never tried it. Did you try?

[Neha Kanojia]

it is not working, showing the depvar should be more than or equal to zero.

Earlier my dataset was having only 10 countries pairs only, you suggested me that it can give unreliable results due to less number of observation. Now I have changed my objective, currently, I have 80 countries pairs but the problem is that some of the observations in my depvar are negative so which model will be more appropriate for such type of bilateral data

augmented gravity model(log- log)
or
ppml
or
ppmlhdfe

Can I add a constant value in all the depenvar observations to make it zero or positive so that I can apply the augmented gravity model or ppmlhdfe ? which one will be more appropriate ?

[Neha Kanojia]

I got the below-attached results when applying ppmlhdfe command. please guide me, should I apply both the model and check the model fit of the fitted model then compare or only one of them ?

[Joao Santos Silva]

Dear Neha Kanojia,

I do not know enough about what you are doing to be able to comment. Please discuss the results with your supervisor.

Best wishes,

Joao

[Kodjo Selom Amessinou]

Dear Joao Santos Silva
I'm new in the forum, I would like to ask one question how we justify the use exporter , importer and year fixed effect in gravity using ppml estimation method.
and also how could we interpret the coefficient of log of Distance , exporter and importer GDP.
Thanks

[Joao Santos Silva]

Dear Kodjo Selom Amessinou,

Welcome to the forum. Please have a look at this.

Best wishes,

Joao

[Kodjo Selom Amessinou]

Thank Sir