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Thread: Panel Data Regression Models!

  1. #1
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    Panel Data Regression Models!

    Hello mates!

    I am doing thesis (research) as part of my degree completion requirement. My topic is a general one “Capital Structure and Corporate Financial Performance: A case study of listed FMCG firms”.

    For study, Capital Structure is an “independent variable” (IV) whereas financial performance is “dependent variable” (DV). The proxy measures for IV are Short Term debt to Total Assets (STDTA), Long term debt to total assets (***TA), Total Debt to total Assets (TDTA) and Debt-Equity ratios. For DV the proxies are ROE, ROA, NPM, P/E, Tobin’s Q. The characteristics of data is that of panel data as the research is dealing with 12 firms over a period of 5 years (60 observations for each variable).

    The research is stuck at “Data Analysis” chapter because I am unable to comprehend statistical concepts with respect to regression (I know what regression is but don't know what to do in case of panel data).

    These are issues I am facing at the moment and need help with them:
    1. The panel data has no normal distribution, and also has some outliers (3 observations out each 60) which drastically affects the means and standard deviations. How to deal with this issue?
    2. What regression estimation model should be used/run? Fixed effects, Random Effects or both for my panel data? How can I do it in SPSS?
    Kindly help me on these issues.
    Your help will be greatly appreciated.

    Best Regards,

  2. #2
    Points: 136, Level: 2
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    Re: Panel Data Regression Models!

    To answer your first question, Inora Technologies has a free tool that can very easily deal with outliers in 2-dimensional data. I've included the link if you want to check it out: RAE Linear Regression Tool

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