doubt regarding xtabond2 command

[Anuradha Saikia]

What does lag( 2 3) signify in the code below? How to decide on the number of lags in two-step system GMM.
Also my system GMM output does not show the difference in Hansen test in xtabond2. why is it so xtabond2xtabond2 ltfp l.ltfp routsales rndva i.year, iv(i.year) gmm(routsales rndva, lag(2 3)) gmm(ltfp, lag(2 3)) twostep robust artests(3)

[Carlo Lazzaro]

Anuradha:
to the best of my knowledge, the most prolific contributors on this topic are Sebastian Kripfganz and David Roodman,
Skim through their posts.

[Anuradha Saikia]

Thank you Carlo Lazzaro . please help me Sebastian Kripfganz and David Roodman

[Jared Greathouse]

The help file says

The optional laglimits(a b) suboption can override these defaults: for the transformed equation, lagged levels dated t-a to t-b are used as instruments, while for the levels equation, the first-difference dated t-a+1 is normally used. a and b can each be missing ("."); a defaults to 1 and b to infinity. They can even be negative, implying "forward" lags.

Presumably the choice of lags is a theoretical or methodological choice that can't be answered independent of context.

[Anuradha Saikia]

Thank you Jared Greathouse