Hi, I have a balanced dataset of 1285 observations (257 firms, 5 years). I have been trying Proc Panel using Parks method. The SAS code is as follow: proc sort data=Warranty.Paneldataset; by ASXCode Year; run; proc panel data=Warranty.Paneldataset outest=Warranty.Reg1_Parks; ID ASXCode Year; Reg1_Parks: model Leverage = WBtoTA Size AssetCollateralValue ROA ROAVolatility NonDebtTaxShield TobinsQ TotalAccruals HerfindahlIndex RDIntensity GICS1010 GICS1510 GICS2010 GICS2020 GICS2030 GICS2510 GICS2520 GICS2530 GICS2540 GICS2550 GICS3010 GICS3020 GICS3030 GICS3510 GICS3520 GICS4510 GICS4520 GICS4530/ Parks; quit; Here is what is I get in the log "NOTE: Estimated autoregression parameter RHO=1.032 did not satisfy |RHO|<1.0 criteria for cross section ASXCode=WEB. It will be set to a value within range. ERROR: The number of observations is too small to permit estimation of the regression parameters in model statement REG1_PAR." The NOTE is written 34 times for different firms. Please note that all of the below are dummy variables GICS1010 GICS1510 GICS2010 GICS2020 GICS2030 GICS2510 GICS2520 GICS2530 GICS2540 GICS2550 GICS3010 GICS3020 GICS3030 GICS3510 GICS3520 GICS4510 GICS4520 GICS4530 DW and Godfrey tests confirm the presence of autocorrelation. Any ideas why Parks is not working, how can I solve this problem. Thanks
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