My gravity model is to estimate the effect of farm subsidy on farm export. Country fixed effect and time fixed effect exists in my model (The Gravity Equations: Workhorse, Toolkit, and Cookbook said, but I don't know how to explain the reason).
- I want to control these fixed effects by adding dummy variables in my model, but it is hard to know when the country fixed effect and time fixed effect equal to 0 or 1 in stata.
- [size=14.6667px]Ajt include all the time-varying variables of importer j in year t to reduce the effect of importer country's subsidy on exporter's export. It seems like weird when [size=14.6667px]Ajt combines the country fixed effect and time fixed effect; Bi represent the country fixed effect. Should I change my dummy variables?
- [size=14.6667px]Could you please give me some advice about how to explain the reason and solution of these fixed effects?
Thank you so much!