Dear Stata community I have a burning question. I am running a regression according to the current international trade literature. However either using reg or xtreg with fixed effects some firms are omitted due to collinearity, and firm no.1 was "dropped" to prevent the dummy variable trap. After reading many post I didn't get a clear answer to my problem. Therefore my questions.
i) Is this something common?
ii) Is this something I can leave with, as I am mostly interested in the value of status?
iii) If not. Is there anything I can do?
reg lval status lage lsize iext i.year i.industry i.firm
note: 3258.firm omitted because of collinearity
note: 3381.firm omitted because of collinearity
Source | SS df MS Number of obs = 9400
-------------+------------------------------ F(1795, 7604) = 9.87
Model | 2783.47115 1795 1.5506803 Prob > F = 0.0000
Residual | 1194.87009 7604 .157137045 R-squared = 0.6997
-------------+------------------------------ Adj R-squared = 0.6288
Total | 3978.34124 9399 .42327282 Root MSE = .39641
------------------------------------------------------------------------------
lval | Coef. Std. Err. t P>|t| [95% Conf. Interval]
-------------+----------------------------------------------------------------
status | .0219116 .0209441 1.05 0.296 -.0191446 .0629679
lage | .1520159 .0279789 5.43 0.000 .0971695 .2068623
lsize | -.1636843 .0185827 -8.81 0.000 -.2001115 -.1272571
iext | .0386521 .053303 0.73 0.468 -.0658364 .1431406
Should you need more info, do not doubt to let me know.
i) Is this something common?
ii) Is this something I can leave with, as I am mostly interested in the value of status?
iii) If not. Is there anything I can do?
reg lval status lage lsize iext i.year i.industry i.firm
note: 3258.firm omitted because of collinearity
note: 3381.firm omitted because of collinearity
Source | SS df MS Number of obs = 9400
-------------+------------------------------ F(1795, 7604) = 9.87
Model | 2783.47115 1795 1.5506803 Prob > F = 0.0000
Residual | 1194.87009 7604 .157137045 R-squared = 0.6997
-------------+------------------------------ Adj R-squared = 0.6288
Total | 3978.34124 9399 .42327282 Root MSE = .39641
------------------------------------------------------------------------------
lval | Coef. Std. Err. t P>|t| [95% Conf. Interval]
-------------+----------------------------------------------------------------
status | .0219116 .0209441 1.05 0.296 -.0191446 .0629679
lage | .1520159 .0279789 5.43 0.000 .0971695 .2068623
lsize | -.1636843 .0185827 -8.81 0.000 -.2001115 -.1272571
iext | .0386521 .053303 0.73 0.468 -.0658364 .1431406
Should you need more info, do not doubt to let me know.
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