Structural changes in heterogeneous panels with endogenous regressors

Baltagi, Badi H.; Feng, Qu; Kao, Chih Hwa Duke

doi:10.1002/jae.2712

Cited by 19 publications

(7 citation statements)

References 27 publications

(83 reference statements)

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“…Further, it can be used regardless whether T is greater than N or not. Baltagi et al (2018) show that Pesaran's (2006) procedure is still valid to consider crosssectional dependence stemming from error factors even in the presence of endogeneity and structural changes in slopes and error factor loadings. There are two versions of the CCE estimator for the mean value of individual coefficients,…”

Section: Estimation and Discussion Of Resultsmentioning

confidence: 92%

Implications of Capital Flows for Domestic Credit Growth: Evidence From Panel Data Analysis

Soydan¹,

Kara²

2020

EJEF

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Following the 2007-2009 global crisis, high credit growth became an issue of concern with an emphasis on its relationship with capital flows. It is argued that large and volatile international capital flows lead to credit expansion, which in turn, may cause economic and financial instabilities when it reaches excessive levels, particularly in developing countries. This paper aims to investigate the association between credit growth and capital inflows in the context of developing countries by using panel data analysis. The methodology employed in the study offers a number advantages by allowing for heterogeneity and cross-sectional dependence in the panel, while also considering the endogeneity issue. The overall results of the study provides evidence for the impact of capital inflows, more particularly other capital inflows, on credit growth in the sample. This finding suggests a more direct relationship between capital inflows and credit creation as other inflows mostly comprise international banking and trade credits. It is not surprising given the fact that banking sector has a critical role in the financial systems of developing countries. The significance of international dimension for credit creation through other capital inflows and the intermediary role of the banking system should have monetary policy implications, in the macroprudential or more conventional fashion.

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Section: Estimation and Discussion Of Resultsmentioning

confidence: 92%

Implications of Capital Flows for Domestic Credit Growth: Evidence From Panel Data Analysis

Soydan¹,

Kara²

2020

EJEF

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“…( 2019 ) demonstrate that the common factor approach helps control for UCFs even under the presence of endogenous regressors. Furthermore, the cross‐sectional mean of parameters can be consistently estimated by the mean‐group type estimators with endogenous variables (MG‐IV) (Baltagi et al., 2019 ; Feng, 2020 ). 10 Accordingly, the estimated coefficient on LE is imprecisely estimated at conventional levels of statistical significance when I account for UCFs and parameter heterogeneity.…”

Section: Robustnessmentioning

confidence: 96%

“…Baltagi et al. ( 2019 ) demonstrate that the common factor approach helps control for UCFs even under the presence of endogenous regressors. Furthermore, the cross‐sectional mean of parameters can be consistently estimated by the mean‐group type estimators with endogenous variables (MG‐IV) (Baltagi et al., 2019 ; Feng, 2020 ).…”

Section: Robustnessmentioning

confidence: 99%

Life expectancy and human capital: New empirical evidence

2022

Health Economics

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This paper re-examines a well-established hypothesis postulating that life expectancy augments incentives for human capital accumulation, leading to global income differences. A major distinguishing feature of the current study is to estimate heterogeneous panel data models under a common factor framework, which explicitly accounts for parameter heterogeneity, unobserved common factors (UCFs), and variables' non-stationarity. In sharp contrast to most previous studies, I find that the impact of health improvements on human capital accumulation turns out to be imprecisely estimated at conventionally accepted levels of statistical significance. I demonstrate that conventional estimates of the educational returns to rising longev-

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“…This technique uses cross-sectional demeaned variables and provides robust findings in the existence of cross-sectional dependence and heterogeneity problems. Furthermore, Baltagi et al (2019) showed that the CCE estimators are valid even in the presence of endogeneity and structural changes. After examining the long-run relationship, to determine the direction of causality between export and labour productivity, the heterogeneous panel causality test developed by Dumitrescu and Hurlin (2012) was employed.…”

Section: Econometric Approachmentioning

confidence: 99%

Service Exports and Productivity: Evidence from OECD Panel Data

Ağazade¹

2021

Politicka ekonomie

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This study aims to investigate the relationship between service exports and productivity in 27 OECD countries by using a panel dataset for the years 1995-2018. In the theoretical context, this relationship is basically handled by the learning-by-exporting and selfselection mechanisms. Additionally, product life cycle and technological gap theories also have implications related to the export and productivity association. In the study, after detecting the cross-sectional dependence, the stationarity characteristics of the exports and productivity series were investigated by Pesaran's ( 2007) panel unit root tests. The findings of Westerlund ( 2007) panel co-integration test indicated that there is a longrun equilibrium relationship between service exports and productivity. Common correlated effects estimators also supported this finding and showed that productivity affects exports positively in both short and long run. Finally, Dumitrescu and Hurlin's (2012) heterogeneous panel causality tests showed that there is a unidirectional causal relationship running from productivity to service exports. The findings support the predictions of product life cycle theory and technological gap theory regarding the exports and productivity linkage and indicate the validity of the self-selection mechanism for OECD countries' service exports.

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Structural changes in heterogeneous panels with endogenous regressors

Cited by 19 publications

References 27 publications

Implications of Capital Flows for Domestic Credit Growth: Evidence From Panel Data Analysis

Implications of Capital Flows for Domestic Credit Growth: Evidence From Panel Data Analysis

Life expectancy and human capital: New empirical evidence

Service Exports and Productivity: Evidence from OECD Panel Data

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