I have a small sample of about 50 firms, clustered in 20 countries.
The main explanatory variables of interest are all firm-specific, as well as the dependent variable.
However, I also want to include a possible control variable on the country-level (imagine ''unemployment_rate").
Can I just use an OLS regression with robust standard errors? Or is there some severe bias then that I overlook?
Thanks for any input!
The main explanatory variables of interest are all firm-specific, as well as the dependent variable.
However, I also want to include a possible control variable on the country-level (imagine ''unemployment_rate").
Can I just use an OLS regression with robust standard errors? Or is there some severe bias then that I overlook?
Thanks for any input!