Hi Guys,

I am doing a research on the effect of Covid-19 (2019-2021) and the financial crisis of 2007 (2007-2009)of firm innovation performance. I am in the possession of a panel data file with in total 11312 observation of 707 companies over the period 2006-2021. The dependent variable is R&D expenditure, and some independent variables are company size, revenue, total assets. I know that commonly used models are the fixed or random effects model, but I am not so sure if one of these models is the right one... Has some of you maybe an idea? This would really help me out !!


Less is more. Stay pure. Stay poor.
Time series or random effects may be of interest, since observations across years are correlated. For example, my weight today is correlated with my weight last week and to a lesser extent the week prior. Ignoring this dependency structure across time can lead to biases in the interpretation of output.


No cake for spunky
Since all time series is rough I suggest intervention analysis (some call this piece regression). Analyze if the slope changed as result of the interventions. If the change is a pulse, so it occurs than fades away pretty much entirely, or the impact is too gradual this won't work. There are also test of structural breaks which suggest a permanent change.