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Should I include year effects in my logistic regression?

  • 1.  Should I include year effects in my logistic regression?

    Posted Tue June 28, 2022 04:37 PM

    I made the following logistic regression model for my master's thesis.

    FAIL= LATE + SIZE + AGE + EQUITY + PROF + SOLV + LIQ + IND. Where I take a look if late filing of financial statements (independent variable) is an indicator of failure of small companies (dependent variable). FAIL is a dummy variable that is equal to 1 when a company failed during one of the researched years. I use data covering 3 years (2017, 2018 en 2019). Should I include a dummy variable YEAR, to account for year effects, or not. I have searched online but I don't understand what it exactly means and that is why I don't know if it is necessary to include it in this regression model. I hope you guys can help me.
    Thank you in advance!



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    Tom Raemdonck
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