quick question about dividing the variable on the previous year

[Omar Shaher]

Dear researchers,
I have quick question, please.
While I am reading papers, I have found one use the following model:
Dep = Indep1 + Indep2 + Indep3 + Indep4 + Indep5
And as you know there is a measurement for each variable.
I have noticed that the dependent variable scaled by the previous total assets. Likewise, the indep 3 and 4 also scaled the previous total assets. However, Indep1 and Indep 5 scaled by the current total assets. So, my question why they scale the variables by the previous year, shall I scall all independent variables by the previous year or it depend on something??


Thanks in advance.

[Ken Chui]

Modeling approaches differ based on the types and motivations of the model. Without knowing the nature and the details of the paper you read it's not possible to judge. Since this is not related to Stata, consider also positing it on other forums that specifically answer statistics questions (e.g. Cross Validated at Stack Exchange, or r\askstatistics on Reddit, etc.) And remember to provide the citation, otherwise the chance of getting an answer will be very low.

[Omar Shaher]

Thank you Ken for the answer. Much appreciated.