Trouble creating dummies

Question

I'm currently using a CSV file to import multiple datasets in R. This dataset contains 2500 variables over 16 columns. I'm trying to make a regression function with lm in R. But when I try to make a dummy variable for year effects or industry effects, the regression won't work.

This is how I create the dummy variable:

CNAME <- factor(Combined.data[6], levels=c(1:20), labels= c("AUSTRIA", "BELGIUM", "DENMARK", 
"FINLAND", "FRANCE", "GERMANY", "IRELAND", "ISLE OF MAN", "ITALY", "LUXEMBOURG",
"NETHERLANDS", "NORWAY", "POLAND", "PORTUGAL", "SPAIN", "SWEDEN", "SWITZERLAND",
"TURKEY", "UNITED KINGDOM", "UNITED STATES"))

And this is what the regression function looks like:

results <- lm(Tax_Avoidance ~ ENVSCORE + CGVSCORE + SOCSCORE + ECNSCORE + Size +
                Leverage + ROA + MTB + ROA + RND + AUD + PPE + Intang + CDP +
                CHS + NET + CNAME,
              data = finalresults)

summary(results)

I cannot see what I'm doing wrong, I appreciate your help.

What do you mean "the regression doesn't work"? Are you getting an error of some kind? If so you should include that. When asking for help, you should include a simple [reproducible example](https://stackoverflow.com/questions/5963269/how-to-make-a-great-r-reproducible-example) with sample input and desired output that can be used to test and verify possible solutions. — MrFlick, May 18 '18 at 15:23
What is `Combined.data[6]` and what is `finalresults` ? Could you upload a small set of those datasets, so we can reproduce your problem? — SeGa, May 18 '18 at 15:25
Related Q&A: [*Generate a dummy-variable*](https://stackoverflow.com/q/11952706/2204410) — Jaap, May 18 '18 at 15:26
I'm sorry for my late response, I've been very busy the last couple of days. The Q&A Jaap posted has helped me figure it out. I want to thank you all for your time and help. Next time when I post a question, I'll take all of your tips in consideration. For this project I have to deal with classified information, so I could not post any data or csv files. Thank you all — VishJ, May 20 '18 at 17:30

score 0 · Answer 1 · answered May 18 '18 at 17:13

Will this not work for you? Without knowing the error its difficult to know whats going wrong.

CNAME <-  c("AUSTRIA", "BELGIUM", "DENMARK", 
                                                            "FINLAND", "FRANCE", "GERMANY", "IRELAND", "ISLE OF MAN", "ITALY", "LUXEMBOURG",
                                                            "NETHERLANDS", "NORWAY", "POLAND", "PORTUGAL", "SPAIN", "SWEDEN", "SWITZERLAND",
                                                            "TURKEY", "UNITED KINGDOM", "UNITED STATES")

df <- data.frame(replicate(10,sample(0:50,20,rep=TRUE)))
df <- cbind(df, CNAME)

library(dummies)
df <- as.data.frame(df)
df <- dummy.data.frame(df)


results <- lm(X1 ~ ., data = df)
summary(results)

With the data.frame:

  X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 CNAMEAUSTRIA CNAMEBELGIUM
1 41 27  3 28  6  3 35 19  3  34            1            0
2 41 41 30 22 15 42 44 42  6  41            0            1
3 13  1 26 35 44 22 13 11 46  47            0            0
  CNAMEDENMARK CNAMEFINLAND CNAMEFRANCE CNAMEGERMANY CNAMEIRELAND
1            0            0           0            0            0
2            0            0           0            0            0
3            1            0           0            0            0
  CNAMEISLE OF MAN CNAMEITALY CNAMELUXEMBOURG CNAMENETHERLANDS
1                0          0               0                0
2                0          0               0                0
3                0          0               0                0
  CNAMENORWAY CNAMEPOLAND CNAMEPORTUGAL CNAMESPAIN CNAMESWEDEN
1           0           0             0          0           0
2           0           0             0          0           0
3           0           0             0          0           0
  CNAMESWITZERLAND CNAMETURKEY CNAMEUNITED KINGDOM CNAMEUNITED STATES
1                0           0                   0                  0
2                0           0                   0                  0
3                0           0                   0                  0

Trouble creating dummies

1 Answers1