If You Included Both Time and Entity Fixed Effects in the Regression

question 11

Short Answer

If you included both time and entity fixed effects in the regression model which includes a constant, then a. one of the explanatory variables needs to be excluded to avoid perfect multicollinearity.
b. you can use the "before and after"' specification even for $T > 2$ .
c. you must exclude one of the entity binary variables and one of the time binary variables for the OLS estimator to exist.
d. the OLS estimator no longer exists.

---

Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership equity of the shareholders.

Assets

Economic resources owned or controlled by a business or individual that are expected to provide future benefits.

Stockholders' Equity

The value of a company's assets minus its liabilities, representing the ownership interest of the shareholders.

Accounting Equation

The fundamental equation of accounting stating that Assets = Liabilities + Owners’ Equity.