Which regression model i should use

[George Paily]

Hi. i have a data set of firms where i'm trying to see the impact of different innovation strategies on product innovation and in the second stage i want to see how product innovation affect firm performance. can anyone help which model will be useful in this context ?

[Phil Bromiley]

Welcome to Stata list. You didn't get a quick answer – you'll increase your chances of useful answer by following the FAQ on asking questions: provide Stata code in code delimiters, readable Stata output and sample data using dataex.

First, you have panel data so you're probably going to want to use a panel estimator. However, if innovation strategies are stable over time within firms, then a between model is more likely to be appropriate. You will certainly want to use lags on the right-hand side to reduce the contemporary correlation problem.

[George Paily]

Thank you very much Phil