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Problem 6 A sample of panel data was gathered for 55 countries and 20 years for earnings per share (EPS, measured in US
Posted: Wed May 11, 2022 11:16 am
by answerhappygod
- Problem 6 A Sample Of Panel Data Was Gathered For 55 Countries And 20 Years For Earnings Per Share Eps Measured In Us 1 (199.77 KiB) Viewed 24 times
Problem 6 A sample of panel data was gathered for 55 countries and 20 years for earnings per share (EPS, measured in US dollars) and market capi- talization (Size, measured in millions of US dollars). Pooled OLS estimation yields the following: EPS = 1.557 + 0.149 x Size. (0.532) (0.038) (a) Interpret the estimated slope coefficient value of 0.149. (6) What does the fitted regression predict will be the EPS when market capitalization is $1.653M? (c) The average market capitalization for firms in the sample is $1.958M. What is the average value of EPS in the sample? (d) Construct a 95% confidence interval for B1, the regression slope coef- ficient. (e) Conduct a two-sided test of the null hypothesis Ho : B1 = 0. Do you reject the null hypothesis at the 10% level? At the 5% level? At the 1% level? (f) What is the major drawback to relying on the pooled OLS regression approach for this panel of data? Discuss the inclusion of entity fixed effects to improve the reliability of the estimation results. =