I need to estimate a production function using the olley-pakes semiparametric estimation procedure. I am using the routine -opreg- (developed by Yasar, Raciborski, & Poi).
I don't have firms that exit the panel and this seems to be a problem when running opreg.
The option "exit" in the command is required. For this reason I have constructed a dummy (that I called E) which is equal to 0 in each period for every firm.
Then I run the following command:
opreg lY, state(lK) proxy(lI) free(lL lM) exit(E)
where lY=ln(sales)
lk=ln(fixed assets)
lL=ln(employees)
lM=ln(intermediates)
lI=ln(investments)
I get the following message:
an error occurred when bootstrap executed opreg
r(2000);
I tried to run the same command "pretending" that some firms where leaving the market and everything worked fine.
I would really appreciate if anybody could tell me if I am making any mistake and how I can correct it.
Many thanks,
Luigi
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