Dear All,
I have Panel Data fits difference in difference
I regress the (Bilateral Investment Treaties-BIT) on (Bilateral FDI). BIT: is dummy taking 1 if BIT exists and Zero Otherwise. While Bilateral FDI: Amount of FDI between the two economies. Objective: Examine If BIT enhances Bilateral FDI?
The issue is : - Each country have started its BIT with another pair country at a fixed time (different from the others): NO Fixed Time for the whole data.
I am willing to assume different time periods in a random way and run my Diff in Diff (for robustness):
Year 2004
Year 2006
Year 2008
My questions :
(1) Do you suggest this method is efficient?
(2) Any suggestion random selection of time?
Difference in differences uses panel data to measure the differences, between the treatment and control group, of the changes in the outcome variable that occur over time. It should be ok.
Dear Mina Sami ,
From my point of view. There is no problem at all, just keep in mind that you should control for time and country fixed effects in order to get convincing estimates.
Furthermore, in order to convince referees and so, they will ask you to show that the assumption of parallel trends is reasonable (e.g., looking at pre-treatment trends, controlling for country-specific linear time trends, etc.).
I think it will be useful to read.
Introductory Econometrics A Modern Approach F i f th Edition Jeffrey M. Wooldridge Michigan State University
chapter 13 Pooling Cross Sections across Time: Simple Panel Data Methods 448
chapter 14 Advanced Panel Data Methods 484 https://economics.ut.ac.ir/documents/3030266/14100645/Jeffrey_M._Wooldridge_Introductory_Econometrics_A_Modern_Approach__2012.pdf
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