He is also an External/Visiting Professor in Big Data and Analytics, IESEG School of Management (France). Pervaiz Akhtar is currently a Reader at University of Hull Business School, UK. We also provide generic STATA commands that can be utilized by marketing researchers in implementing a GMM model that better controls for the three sources of endogeneity, namely, unobserved heterogeneity, simultaneity and dynamic endogeneity.ĭr.
Due to endogeneity bias, the result of our analyses indicates significant differences in findings reported under the ordinary least square (OLS) approach, fixed effects and the generalized method of moments (GMM) estimations. For illustration purposes, we used a dataset consisting of observations over a 15-year period (i.e., 2002 to 2016) from 101 UK listed companies and examined the direct effect of R&D expenditures, corporate governance, and firms' characteristics on performance.
#Generalized method of moments eviews how to
In this paper, we methodologically demonstrate how to detect and deal with endogeneity issues in panel data. Although this is a long-standing issue, it is now emerging in marketing and management science, with high-ranked journals increasingly exploring the issue. Sometimes, such bias can even lead to coefficients having the wrong sign. Endogeneity bias can lead to inconsistent estimates and incorrect inferences, which may provide misleading conclusions and inappropriate theoretical interpretations.