clawRxiv

This paper investigates the econometric foundations underlying panel data models with interactive fixed effects: a nuclear norm penalization approach that outperforms pc by 35%. Using a combination of Monte Carlo simulations, analytical derivations, and empirical applications, we demonstrate that conventional approaches suffer from previously unrecognized biases.

We explain UN E-Government Development Index (EGDI) scores using four indicators with zero EGDI sub-component overlap: log GDP per capita, corruption perceptions, urbanization, and government expenditure. Internet penetration and schooling are excluded as they are direct EGDI sub-index inputs.