Another look at the instrumental variable estimation of error-components models

Trajectories in Knowledge Economy: Empirics from SSA and MENA Countries

“…The procedure uses lagged levels of the regressors as instruments in the difference equation, and lagged differences of the regressors as instruments in the levels equation, thus exploiting all the orthogonal conditions between the lagged dependent variables and the error term. Between the difference GMM estimator (Arellano & Bond, 1991) and system GMM estimator (Arellano & Bover, 1995;Blundell & Bond, 1998), the system GMM will be given priority, consistent with Bond et al (2001, 3-4) 9 . This GMM estimation approach has been extensively applied in the convergence literature.…”

“…Moreover, the estimation depends on the assumption that the lagged values of the dependent 9 "We also demonstrate that more plausible results can be achieved using a system GMM estimator suggested by Arellano & Bover (1995) and Blundell & Bond (1998 (Fung, 2009). The Fung (2009) has been used in recent African convergence literature (Asongu, 2013a).…”

The Formation of New Firms: An Ordered Probit Model Approach for Latin American and Caribbean Countries

“…For panel data, individual heterogeneity is accounted for by using a random-effects generalized ordered probit approach (Arellano et al 1995). In this case, we find that the outcome probabilities are conditional on the individual effect ߙ .…”

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“…References Generalized Method of Moments as employed (Oraboune, 2008;Seetanah, 2012) Three log forms model with Fixed/random effects techniques (Ravallion and Datt, 1996;Datt and Ravallion, 2002;Ghura et al, 2002) Simultaneous equations Fan et al (2000) Neo-classical production functions such as Cobb-Douglas or log linear production function Fan et al (2004); (Munnell, 1992;Gramlich, 1994;Sturm et al, 1998;Romp and De-Haan, 2005) Simultaneous Equations (A) The Human Capital Channel, (B) The Market Access Channel, and (C) The Labor Activities Channel (Mustajab, 2009;Gachassin et al, 2010) Panel data and Dynamic Panel Analysis Seeanah et al (2009);Wooldridge (2002) Vector Autoregression (VAR) and Vector Error Correction Models (VECM) Perron (1990); Toda and Phillips (1993;1994); Dufour and Renault (1998);Ramirez (2004);Lütkepohl (2005) Structural Vector Autoregressive (SVAR) Sims (1980a;1980b); Amisano and Giannini (1997); Arellano and Bover (1995); Saikkonen and Lütkepohl (2002); Sarte (1997);Ogun (2010) In this study the impact of road infrastructure on Malawi's poverty is assessed from a macroeconomic perspective. The lack of clear theoretical guidance on the choice of regressors, for the poverty equation, leads to a wide set of possible specifications and model uncertainty which in turn often results in contradictory conclusions.…”