st: Variables in reg2hdfe

[emanuele mazzini <madsoenistata@gmail.com>]

Dear all,

I know the question I am posing to you can be probably trivial, but
still I need to clarify my doubt.
I am running the reg2hdfe estimation on a dyadic panel dataset (i.e. I
have pairs of countries over the years 1950-2006) where I created the
following indicators to include country-time fixed effects:

egen it=group (iso_o year)
egen jt=group (iso_d year)

where iso_o and iso_d represent, respectively, the exporting and the
importing country. Hence, my estimation looks like:

reg2hdfe ln(trade) $controls, id1(it) id2(jt) cluster(dyad)"

Specifically, I am in doubt about the possiblity whether or not to
include into my controls the log of gdp per capita of each country as
well as the log of population. I know that they are time-variant, but
I assume them to be included into the it and jt variables I created.

Could anyone tell me if that is the right procedure?

Thank you in advance,

Regards,

Emanuele.
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