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8

tldr: As the other two answers also indicated, there is not necessarily a problem with your results. It might be the case that the two subgroups have different distributions of the covariates. Alternatively, it might be the case that the within group effects of the law are different from the between group effect. Joint and separate regressions Consider two ...


8

I'd interact the regressor you are interested in with a dummy for the country being developed and see what happens. Its entirely possible that the mechanisms at play in developed contries are different from those in the rest of the world. Depending on what your goal is you might satisfy yourself with the observation that the effects are different for the two ...


7

This sounds like a case of Simpson's Paradox. Did you control for fixed effects? You might also have heterogeneity - there may be different results in developing vs developed countries. Generally, it's not wise to ignore something interesting in your data, but I defer to the advisor who's familiar with the area. It may be a known phenomenon that isn't ...


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