LIMITATIONS OF THE PANEL REGRESSION MODEL APPLICATION: THE EXAMPLE OF THE WESTERN BALKAN COUNTRIES
Keywords:panel regression model, heterogeneity, foreign direct investments, GDP growth
Panel regression model may seem like an appealing solution in conditions of limited time series. This is often used as a shortcut to achieve deeper data set by setting several individual cases on the same time dimension, where cross units visually but not really multiply a time frame. Macroeconometrics of the Western Balkan region assumes short time series issue. Additionally, the structural brakes are numerous. Panel regression may seem like a solution, but there are some limitations that should be considered.
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