I want to test a model like this: enter image description here

alpha denotes full set of country fixed effects and delta denotes full set of year fixed effects in the article in which this model is used.

My model is similar to above model, however I don't know how to create such a model by using Stata.

I think I should add constant or dummy variable. Is this the right way? How can I add such variables by using Stata?

Thanks a lot!

  • 1
    $\begingroup$ I am assuming you are using panel data since you are interested in fixed effects. If you are using the ‘xtreg’ command, just add the option ‘, fe’ to the end. So it would be something like ‘xtreg y x, fe’ $\endgroup$
    – Brennan
    Apr 16 '20 at 9:57
  • $\begingroup$ But it seems like -xtreg, fe- could help me to apply fixed effect only for countries. I need to add dummy variable or find a way to run something like two-way fixed effect test. $\endgroup$ Apr 16 '20 at 15:19
  • $\begingroup$ ‘Xtreg y x i.year, fe’ $\endgroup$
    – Brennan
    Apr 16 '20 at 19:30

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