# Can I apply multiple regression analysis on panel data?

I have total 19 banks with five years data, comprising 95 observations total. I have 5 independent variables and 1 dependent variable. Can i apply multiple regression analysis by taking all five years data at once or I have to apply multiple regression for each year separately?

• I would think you would find trends in the data related to time given that you have multiple years worth of observations, and that these trends relate to other patterns you might detect. But, without knowing more about your data (see this post for more info) I can only offer general comments. Commented Feb 15, 2013 at 14:08

$E(x_{it}^Tu_{it})=0$, $\quad t=1,\dots,5$ (contemporaneous exogeneity)
But you should add dummies for each year to capture general trends (as learner mentioned), and you should adjust the standard errors for serial correlation because in many cases there is a positive correlation between the residuals of a bank $i$ in year $t$ and in year $t+1$
$E(u_{it}u_{is}|x_{i})\neq0$, $\quad t\neq s$