Dear all,
I am currently using the fixed effects model and found that my models contain endogeneity. Based on the journal I am referencing, the authors were using GMM and IV-FE to solve this without adding new variables. Can anyone help and assist me to understand what the authors did because I have absolutely no clue on how to conduct both GMM and IV-FE to solve endogeneity without generating new variable. Here is the indirect quotation from the journal "...there are endogenous and the expected reverse causality between the independent and dependent variables. Therefore, this issue was mitigated by applying the common estimator, which is the GMM that uses IVs (IV-FE) estimators to ensure robustness."
Thank you
I am currently using the fixed effects model and found that my models contain endogeneity. Based on the journal I am referencing, the authors were using GMM and IV-FE to solve this without adding new variables. Can anyone help and assist me to understand what the authors did because I have absolutely no clue on how to conduct both GMM and IV-FE to solve endogeneity without generating new variable. Here is the indirect quotation from the journal "...there are endogenous and the expected reverse causality between the independent and dependent variables. Therefore, this issue was mitigated by applying the common estimator, which is the GMM that uses IVs (IV-FE) estimators to ensure robustness."
Thank you
