Efficient Estimation of Time-Invariant and Rarely Changing Variables in Finite Sample Panel Analyses with Unit Fixed Effects

By Thomas Plümper, Vera E. Troeger. Political Analysis, 2007

989 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/96df2c2b93a4ba9ee7278bd378e53a570ac22b20

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Citations in the corpus

Board diversity and firm performance: evidence from the U.K. SMEs (2017, methodology): “To overcome the methodological difficulty in estimating the FE model, we used Plümper and Troeger (2007) FEVD to estimate the time-invariant variables.”
On the spatial stickiness of UK new firm formation rates (2014, background): “Plümper and Troeger (2007) propose a three-step estimator called fixed-effects vector decomposition (FEVD) to deal with this problem as they perceive it is not only 16 See also discussion in Section 3.2. significance levels that are affected but estimates become unreliable too.”
Fixed Effects Vector Decomposition: A Magical Solution to the Problem of Time-Invariant Variables in Fixed Effects Models? (2011, background): “…1, 2010 Abstract In “Efficient Estimation of Time Invariant and Rarely Changing Variables in Finite Sample Panel Analyses with Unit Fixed Effects,” Plümper and Troeger (2007), propose a three step procedure for the estimation of fixed effects models that, it is claimed, “provides the most…”
An institutional logics approach to social entrepreneurship: Market logic, religious diversity, and resource acquisition by microfinance organizations (2016, background): “Furthermore, when variables of interest vary greatly across countries but are constant or slowly changing over time for each country (as in our case for the religious diversity variable), fixed-effects estimators are also less precise and produce large standard errors (Beck, 2001; Plumper and Troege”
Model specification in the analysis of spatial dependence (2010, background): “…e.g., the model without unit fixed effects, the inclusion of group dummies (rather than unit dummies), estimation with a differenced dependent variable, or the fixed effects vector decomposition model, which only de-means variables that have sufficient within variation (Plümper and Troeger 2007).”
Democracy and State Capacity: Complements or Substitutes? (2015, positive): “This finding has important implications for the debate over democratic sequencing, particularly the argument that the consolidated institutions of a modern state are a precondition for effective democracy (Linz and Stepan 1996; Rose and Shin 2001).”
Estimation of linear dynamic panel data models with time‐invariant regressors (2019, positive): “Subsequently, we regress the first-stage residuals on the time-invariant regressors.1 We achieve identification by us- 1For a static model, Plümper and Troeger (2007) propose a similar three-stage approach that they label fixed effects vector decomposition (FEVD).”
Do microfinance institutions accomplish their mission? Evidence from the relationship between traditional financial sector development and microfinance institutions’ outreach and performance (2013, methodology): “Therefore, we re-estimate some of the regressions using the Fixed Effects Vector Decomposition (FEVD) estimator developed in Plümper and Troeger (2007), designed to tackle time-invariant covariates in models that take up unobserved institution-specific effects.”
A Welfare Analysis of Spectrum Allocation Policies (2009, methodology): “Stage 2: Pseudo-Fixed Effects, Time-Invariant and Rarely Changing Variables In this stage we apply the idea developed by Plümper and Troeger (2007), called Fixed Effects Vector Decomposition (FEVD), which let us improve the efficiency of our 42 This is a reasonable and simpler way to deal with…”
Social democrats and the new partisan politics of public investment in education (2009, background): “…crosssection analyses, a common and widely accepted methodological standard has M.R. Busemeyer: Social democrats and partisan politics 113 yet to emerge, as evinced by current discussions in the relevant literature (Kittel and Winner 2005; Plümper et al. 2005; Plümper and Troeger 2007).”