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Often abbreviated DID or DD, this is a technique for inferring causality from observational data. It involves comparing measurements before and after a treatment occurs (hence, the growth rate) in both a group that received the treatment, and an otherwise comparable group that did not.
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What model should I use? Diff-in-Diff? Stata function?
Try something like this.
Notation:
$\pi^{pre, merged}_{t,j}$: pre-merger combined profit per time period of firm-pairs that merge before merging, where $j$ indexes the post-merger entity (j=1,2).
$ …