In my firm-level dataset I have created a variable for the trading status of a firm in a given year, "tradestat", which looks as follows:
0: non-trading firms
1: exporter only
2: importer only
3: both imports and exports
The majority of firms keep the same trading status across their whole existence. There are, however, an interesting number of firms that switch trading status. My aim was to look at the ex-ante and ex-post productivities of the firms around their switching decision. It turned out to be pretty simple in the end.
Firstly, to get a transition matrix of the switchers and non-switchers, either of the following methods worked fine:
(1) xttrans tradestat, freq
(2) tab tradestat l.tradestat
To look at the ex-ante and ex-post (2 periods before and after) productivities around each switch, I first created a series of dummies:
gen switch01 = 1 if tradestat==1 & l.tradestat==0
This gives a 1 to every firm that was a non-trader in a given period and an exporter in the next.
gen switch02 = 1 if tradestat==2 & l.tradestat==0
This gives a 1 to every firm that was a non-trader in a given period and an importer in the next.
I did this for every potential switch (there are 12 as each of the 4 tradestat could move any of the other 3).
To look at ex-ante and ex-post productivities, I did the following:
su l2.productivity if switch01==1
su l2.productivity if switch02==1
and so on up to
su l2.productivity if switch32==1
for the ex-ante productivities
and
su f2.productivity if switch01==1
for the ex-post productivities
This enabled me to look at what it was I wanted in the beginning. Thanks to Christian, Liam and Fearghal for suggestions
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