Fixed effect on my database

#1

Hello,

Thanks a lot for your answer.

I have a question about fixed effect

I want to do a multivariate regression and I want to incorporate fixed effects by year and by company here is my equation:

𝐢𝐴𝑅=𝛽 +𝛽𝑀𝐴𝑆𝐢+π›½π‘ƒπ‘‚π‘ŠπΈπ‘…+𝛽𝐼𝑁𝐷+𝛽𝐴𝑉𝑂𝐼𝐷+𝛽𝑇𝐸𝑅𝑀+π›½πΌπ‘π·π‘ˆπΏπΊ

  • π‘Œπ‘π‘œπ‘›π‘‘π‘Ÿπ‘œπ‘™(i,t) + Ξ±i + Ξ΄t + Ξ΅i,t

Ξ±i = fixed effect by firms
Ξ΄t = fixed effect by years
Ξ΅i,t = error
control = control variables

My question is the following: I know that there must be only unique peers in my database. But, unfortunately, I sometimes have the same two companies for two similar years (it is not a duplicate, it may be that the first one concerns the beginning of the year and the other one the middle of the year, but we are still in the same year). Can I still use the fixed effect?

Just another information.
I have 2752 unique firms in a sample of 7183 observations.

Is my approach the right one?

I must admit that I am a novice in this field.

Do you have any suggestions?

Thanks you in advance

#2

This is a DSGE modeling forum, not an regression/applied economics one. You may want to try https://economics.stackexchange.com/