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Simple Difference-in-Differences Estimation in Fixed-T Panels

Nicholas Brown, Kyle Butts, Joakim Westerlund

arXiv 26 Jan 2023 · Econometrics · 3 citations (OpenAlex)

arXiv:2301.11358 · PDF · DOI · OpenAlex · Extracted main text

Abstract

The present paper proposes a new treatment effects estimator that is valid when the number of time periods is small, and the parallel trends condition holds conditional on covariates and unobserved heterogeneity in the form of interactive fixed effects. The estimator also allow the control variables to be affected by treatment and it enables estimation of the resulting indirect effect on the outcome variable. The asymptotic properties of the estimator are established and their accuracy in small samples is investigated using Monte Carlo simulations. The empirical usefulness of the estimator is illustrated using as an example the effect of increased trade competition on firm markups in China.

Citation extraction

32
references
64
in-text mentions
32
distinct cited
3
self-citations
11,420
main-text words

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Chan, M. K. and S. S. Kwok (2022) The PCDID approach: difference-in-differences when trends are potentially unparallel and stochastic1.00064100%
2Caetano, C., B. Callaway, S. Payne, and H. S. Rodrigues (2022) Difference in Differences with Time-Varying Covariates, ArXiv: 2202.029030.92843100%
3Callaway, B. and S. Karami (2020) Treatment Effects in Interactive Fixed Effects Models, ArXiv: 2006.157800.73732100%
4Pesaran, M. H (2006) Estimation and inference in large heterogeneous panels with a multifactor error structure0.73732100%
5Lu, Y. and L. Yu (2015) Trade liberalization and markup dispersion: evidence from China's WTO accession0.69371100%
6Fan, H., X. Gao, Y. A. Li, and T. A. Luong (2018) Trade liberalization and markups: Micro evidence from China0.64441100%
7Brown, N. and K. Butts (2022) A Unified Framework for Dynamic Treatment Effect Estimation in Interactive Fixed Effect Models self0.64422100%
8Moon, H. R. and M. Weidner (2015) Linear regression for panel with unknown number of factors as interactive fixed effects0.64422100%
9Deng, X., R. Jing, and Z. Liang (2018) Trade liberalisation and domestic brands: Evidence from China's accession to the WTO0.58531100%
10Mao, Q. and J. Xu (2019) Input trade liberalisation, institution and markup: Evidence from China's accession to the WTO0.58531100%

Showing the top 10 of 32 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Treatment Effects in Staggered Adoption Designs with Non-Parallel Trends0.64422