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Estimating outcomes in the presence of endogeneity and measurement error with an application to R&D

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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Estimating outcomes in the presence of endogeneity and measurement error with an application to R&D. / De Silva, Dakshina; Hubbard, Timothy; Schiller, Anita et al.
In: Quarterly Review of Economics and Finance, Vol. 88, 30.04.2023, p. 278-294.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

De Silva, D, Hubbard, T, Schiller, A & Tsionas, M 2023, 'Estimating outcomes in the presence of endogeneity and measurement error with an application to R&D', Quarterly Review of Economics and Finance, vol. 88, pp. 278-294. https://doi.org/10.1016/j.qref.2023.01.010

APA

De Silva, D., Hubbard, T., Schiller, A., & Tsionas, M. (2023). Estimating outcomes in the presence of endogeneity and measurement error with an application to R&D. Quarterly Review of Economics and Finance, 88, 278-294. https://doi.org/10.1016/j.qref.2023.01.010

Vancouver

De Silva D, Hubbard T, Schiller A, Tsionas M. Estimating outcomes in the presence of endogeneity and measurement error with an application to R&D. Quarterly Review of Economics and Finance. 2023 Apr 30;88:278-294. Epub 2023 Feb 14. doi: 10.1016/j.qref.2023.01.010

Author

De Silva, Dakshina ; Hubbard, Timothy ; Schiller, Anita et al. / Estimating outcomes in the presence of endogeneity and measurement error with an application to R&D. In: Quarterly Review of Economics and Finance. 2023 ; Vol. 88. pp. 278-294.

Bibtex

@article{b077dee021e443c2be89dea3bdfa84ca,
title = "Estimating outcomes in the presence of endogeneity and measurement error with an application to R&D",
abstract = "We adopt a Bayesian econometric technique to address issues of endogeneity and measurement error when estimating outcomes while also tackling censoring. We motivate our study based on the theoretical framework laid out by Dasgupta and Stiglitz [1980] to highlight the endogeneity issue by investigating the relationship between market structure and innovation. We apply our method to estimate the R&D expenditures for Chinese manufacturing firms to highlight the importance of the econometric issues. Reduced-form results suggest a nonlinear relationship between market concentration and R&D expenditures, while our approach suggests a strictly positive relationship consistent with canonical theoretical models built on oligopolistic competition.",
keywords = "Measurement error, Endogeneity, Bayesian methods, Markov chain, Research and development",
author = "{De Silva}, Dakshina and Timothy Hubbard and Anita Schiller and Mike Tsionas",
year = "2023",
month = apr,
day = "30",
doi = "10.1016/j.qref.2023.01.010",
language = "English",
volume = "88",
pages = "278--294",
journal = "Quarterly Review of Economics and Finance",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - Estimating outcomes in the presence of endogeneity and measurement error with an application to R&D

AU - De Silva, Dakshina

AU - Hubbard, Timothy

AU - Schiller, Anita

AU - Tsionas, Mike

PY - 2023/4/30

Y1 - 2023/4/30

N2 - We adopt a Bayesian econometric technique to address issues of endogeneity and measurement error when estimating outcomes while also tackling censoring. We motivate our study based on the theoretical framework laid out by Dasgupta and Stiglitz [1980] to highlight the endogeneity issue by investigating the relationship between market structure and innovation. We apply our method to estimate the R&D expenditures for Chinese manufacturing firms to highlight the importance of the econometric issues. Reduced-form results suggest a nonlinear relationship between market concentration and R&D expenditures, while our approach suggests a strictly positive relationship consistent with canonical theoretical models built on oligopolistic competition.

AB - We adopt a Bayesian econometric technique to address issues of endogeneity and measurement error when estimating outcomes while also tackling censoring. We motivate our study based on the theoretical framework laid out by Dasgupta and Stiglitz [1980] to highlight the endogeneity issue by investigating the relationship between market structure and innovation. We apply our method to estimate the R&D expenditures for Chinese manufacturing firms to highlight the importance of the econometric issues. Reduced-form results suggest a nonlinear relationship between market concentration and R&D expenditures, while our approach suggests a strictly positive relationship consistent with canonical theoretical models built on oligopolistic competition.

KW - Measurement error

KW - Endogeneity

KW - Bayesian methods

KW - Markov chain

KW - Research and development

U2 - 10.1016/j.qref.2023.01.010

DO - 10.1016/j.qref.2023.01.010

M3 - Journal article

VL - 88

SP - 278

EP - 294

JO - Quarterly Review of Economics and Finance

JF - Quarterly Review of Economics and Finance

ER -