Handling the measurement error problem by means of panel data: Moment methods applied on firm data



Carlo experiments.

The between period (BP) estimates on levels for the original and the reverse
regression give virtually the same input elasticity for materials. For capital, we find
substantial deviations between the two sets of BP estimators, which may indicate
that measurement errors or disturbances have period specific, or strongly serially
correlated, components.

Finally, we find that GMM estimates based on the equation in levels are more
precise than those based on the equation in differences. Deducting period means
from levels to compensate for non-stationarity of the latent regressor, give estimates
for the level equation which are less precise and more sensitive to the choice of in-
strument set than those operating on untransformed levels. On the other hand, this
kind of transformations of level variables may be needed to compensate for period
effects, mis-specified dynamics, or non-stationarity of the variables, in particular
for the capital input variable. It should come as no surprise that the adjustment
of material input is far easier to model within the framework considered than is
capital.

27



More intriguing information

1. Foreign Direct Investment and Unequal Regional Economic Growth in China
2. The Shepherd Sinfonia
3. Education Research Gender, Education and Development - A Partially Annotated and Selective Bibliography
4. Fortschritte bei der Exportorientierung von Dienstleistungsunternehmen
5. Intertemporal Risk Management Decisions of Farmers under Preference, Market, and Policy Dynamics
6. The name is absent
7. The name is absent
8. Demographic Features, Beliefs And Socio-Psychological Impact Of Acne Vulgaris Among Its Sufferers In Two Towns In Nigeria
9. Should informal sector be subsidised?
10. The name is absent