A practical test for strict exogeneity in linear panel data models with fixed effects

C-Tier
Journal: Economics Letters
Year: 2016
Volume: 147
Issue: C
Pages: 27-31

Authors (3)

Su, Liangjun (Tsinghua University) Zhang, Yonghui (not in RePEc) Wei, Jie (not in RePEc)

Score contribution per author:

0.335 = (α=2.01 / 3 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper provides a practical test for strict exogeneity in linear panel data models with fixed effects when the number of individuals N goes to infinity while the number of time periods T is fixed. The test is based on the supremum of a sequence of Wald test statistics. Under suitable conditions, we establish the asymptotic distribution of the test statistic and consistency of the test. A bootstrap procedure is proposed to improve the finite sample performance and the validity of the procedure is justified. We investigate the finite sample performance of the test via a small set of Monte Carlo simulations.

Technical Details

RePEc Handle
repec:eee:ecolet:v:147:y:2016:i:c:p:27-31
Journal Field
General
Author Count
3
Added to Database
2026-01-29