Hello Rodrigo,
Thanks for your prompt reply.I should list the command that I used.It is
. clogit choice be dk fi fr de gr ie it nl pt es se gb no ch leatr lmcentrality
loecdlcost1 lunempl lpatents lutility lagglpharma2 leatragglpharma2,group(id)
where "choice" is the dependent variable,"be" to "ch" are 15 locational
dummies.All other variables are explained in my post.It is as suggested in the
Stata 8.0 manual to include choices(here is country).Do you think it is ok to
ignore locational dummies?
Thanks in advance and enioy the summer.
Kevin Zhang
���� "Rodrigo A. Alfaro" <[email protected]>:
> Xiaoheng,
>
> Suppose that the variable id is the code for country (better to use numbers
> than
> letter), then you should type -clogit y x1 x2, group(id)- which should be
> "similar"
> to run a FE model.
>
> Rodrigo.
>
>
> ----- Original Message -----
> From: "Xiaoheng Zhang" <[email protected]>
> To: <[email protected]>
> Sent: Saturday, June 17, 2006 4:35 PM
> Subject: st: 3 questions about Clogit on location choice
>
>
>
> Dear all viewers,
>
> I have three questions about the use of the clogit command.
>
> My project is about location choice of one group of new firms inside EU15
> countries and Norway and Switzerland.Time span of the firm's
>
> establishment is from 1995 to 2003.Choice of each new firms' location
> depends on
> the locational characteristics(like GDP and corporate tax
>
> rate).Following is a list of all explanatory variables I use.
>
> leatr: log of effective aveage corporate tax rate from Devereux and Griffith
> (2003).
> lmcentrality: log of national GDP adjusted by distances between countries.
> loecdlcost1:log of labour cost from OECD.
> lunempl:log of unemployment rate from EUROSTAT.
> lpatents:log of patent applications submitted to Eurppean Patent Agency.
> lutility: log of utility prices(weighted value of light fuel and
> electricity).
> lagglpharma2: log of output of pharmaceutical firms in each country.
> leatragglp~2: log of interaction of effective tax rate and national
> pharmaceutical products output.
>
> For each 177 new firms, the explanatory variables is one year previous to
> the
> year the firm was established to tackle the issue of
>
> simultaneity.
>
> The questions are:
>
> 1. Following the introduction of the clogit in Stata manual version 8, I
> generated 15 country dummies(choices,from Belgium to Switzerland
>
> and Austria is reference country) as done by the manual to demostrate
> transportation mode choice problem. But when I regress choice on
>
> these 15 country dummies and country characteristcs,none of explanatory
> variables are significant! But if I ignore country dummies,
>
> coefficients of explanatory variables become significant and most of them
> have
> expected sign.So could I ignore country dummy?Are they
>
> really necessary in my specification?
>
> 2. Because of the data availablity I have to use several different sources
> to
> construct the variable---lagglpharma2---there is a significant time
> inconsistence across the year for each country and but data distribution is
> consistent for each year across countries.For example the output level in
> 1998
> may be higher than that in 1999(normally should be lower because growth) but
> across countries in each year,large country has high output and small
> country
> has low output.........I did my best to make data comparable for different
> years
> and countries by adjusting them with deflator and price index.Will this
> inconsistence cause problem?But I think anyway it is not a panel data
> model,right?
>
> 3.Coefficient of interaction term of effective tax rate and national output
> level is 4.669221 with a P-value equals 0.007.Does this suggest firms tend
> to
> locate in high agglomeration-high tax area,which might support the view that
> high tax rate guaranties better infrastructure and public
> administration,which
> in turn attracts more business?
>
> I am sorry for this lengthy post and thank you in advance.
>
> Kevin Zhang
>
> Department of Economics in Trinity College Dublin
>
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