PSM model

[Radwan]

Hello every one 

I am using propensity score matching model for controlling for potential endogeneity issue.

my study about (( CEO compensation and real earnings management))

the problem is i do not understand how to create a treatment variable (dummy) and based on what.

I need some help in this issue 

because i am not able to run my model with PSM at all.

my model as follow:

REM=CEOPAY+Boardsize+CEOExperise+CEOgender+CEOage+boardindependence+firmsize+Leverage+ROA

please I want to know how to create treatment variable.

thanks in advance.

[JosvanderVelden]

The paper https://support.sas.com/resources/papers/proceedings13/215-2013.pdf may have the information you need.