Q1:

Assume the next equation about the level of intangible assets:

_ = 0 + 1 + 2& + 3 + 4 + u

Where _: the amount of intangible assets (measured in USD). : is the age of the corporation. &: the research and development expenditure of a corporation (measured in USD). : returns on assets. : A dummy that takes the value 1 if the corporation has foreign operations and zero otherwise.

1. Describe what each of 1, 2, 3, and 4 imply, ceteris paribus.
2. Suppose that instead of the eq. (2)

_ = 0 + 1 + 2& + 3 + 4 + u

You have the model: = 0 + 1 + 2& + 3 + 4 + (3) Where : a dummy that takes 1 if a corporations _ > 0 (i.e., a corporation has intangible assets) and zero otherwise. : is the age of the corporation. &: the research and development expenditure of a corporation (measured in USD). : returns on assets. : A dummy that takes the value 1 if the corporation has foreign operations and zero otherwise. Describe what each of 1, 2, 3, and 4 imply, ceteris paribus. Critically assess the reliability of the 1 OLS estimator?