I have a panel data with 90 companies across 5 years. I have the financial variables for each firm each year and a dummy variable equal to 1 if the firm has received an investment. I want to compute the probability for a firm i to go from in category 1 to switch to category 2, knowing that there are 2 categories (high revenue and low revenue firms). I did some research and it appears that Markov switching model is the correct one to use. Could you please confirm that? I am not sure how to run this kind of analysis on stata. Could you please help ? How should I organise my data and what is the correct function to use ? thanks


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