Podcasts about 2sls

In this week's episode Patrick and Greg explore the often neglected method of two-stage least squares; they take a walk down memory lane to explore its origins and then drag it kicking and screaming into the 21st century for much promising use within the latent variable model. Along the way they also mention magic dishwashers, being under-estimated, blind pigs & truffles, Sadie Hawkins, intellectual spinning hook kicks, Fisher's eight-pack abs, the fine print, Winston Churchill vs. Chewbacca, Guinea pigs, Mrs. Lincoln, butter snacks, and snipe hunts.

It is well known that endogeneity leads to inconsistent estimates. Unfortunately, many researchers working outside of economics are not aware of the problem of endogeneity and how to deal with it. Prof. John Antonakis shows how the two-stage least squares (2SLS) estimator recovers causal estimates in the presence of endogeneity (which includes the problem of common-method variance). He also shows that endogeneity can even be prevalent in experimental designs, when researchers estimate mediation models; that is, where the causal effect of an exogenous variable on a dependent variable is mediated by an endogenous variable (or a manipulation check).

Entrepreneurship education has two purposes: To improve students’ entrepreneurial skills and to provide impetus to those suited to entrepreneurship while discouraging the rest. While entrepreneurship education helps students to make a vocational decision its effects may conflict for those not suited to entrepreneurship. This study shows that vocational and the skill formation effects of entrepreneurship education can be identified empirically by drawing on the Theory of Planned Behavior. This is embedded in a structural equation model which we estimate and test using a robust 2SLS estimator. We find that the attitudinal factors posited by the Theory of Planned Behavior are positively correlated with students’ entrepreneurial intentions. While conflicting effects of vocational and skill directed course content are observed in some individuals, overall these types of content are complements. This finding contradicts previous results in the literature. We reconcile the conflicting findings and discuss implications for the design of entrepreneurship courses.

Entrepreneurship education has two purposes: To improve students’ entrepreneurial skills and to provide impetus to those suited to entrepreneurship while discouraging the rest. While entrepreneurship education helps students to make a vocational decision its effects may conflict for those not suited to entrepreneurship. This study shows that vocational and the skill formation effects of entrepreneurship education can be identified empirically by drawing on the Theory of Planned Behavior. This is embedded in a structural equation model which we estimate and test using a robust 2SLS estimator. We find that the attitudinal factors posited by the Theory of Planned Behavior are positively correlated with students’ entrepreneurial intentions. While conflicting effects of vocational and skill directed course content are observed in some individuals, overall these types of content are complements. This finding contradicts previous results in the literature. We reconcile the conflicting findings and discuss implications for the design of entrepreneurship courses.

Chapter 1: Going Multinational: What are the effects on home market performance? A number of recent studies find evidence for the existence of a persistent performance gap between multinational enterprises (MNE) and their domestic competitors. This chapter investigates to what extent MNEs have superior performance characteristics, both prior to and after they have switched from national to multinational activities. In the first case results are quite clear: Future multinationals outperform domestic firms. When comparing ex-post performance of firms an endogenous treatment model is applied to account for selectivity issues. The results suggest that after switching, both productivity and wage growth are higher for newly founded MNEs than for national firms. Employment growth is superior before switching but does not exhibit significantly higher ex-post growth rates. Moreover, capital intensities at multinationals evolve towards the use of capital. Chapter 2: The Impact of FDI on the Skill Structure in German Manufacturing This chapter tests whether foreign direct investment (FDI) of German manufacturing multinationals (MNE) has raised domestic skill intensity between 1996 and 2001. Using a sample of 1,557 firms, the results show that foreign activities of German manufacturing MNEs carry higher average wages on the home market. I interpret this as evidence indicating that part of the skill upgrading in German manufacturing is associated with the rising job export to foreign locations. Other things equal, an increase in overall affiliate employment relative to domestic employment by 10 percentage points raises skill intensity at the parent firm by 0.1% to 0.3%. When distinguishing between different host regions, I find investment in industrialised countries consistent with the horizontal FDI motive, whereas investment in developing countries is driven by vertical production strategies. In the case of transition countries results are inconclusive. Chapter 3: Health and Wages - Panel data estimates considering selection and endogeneity This paper investigates the effects of health on wages by controlling for a number of problems: first, the unobservable genetic endowment may cause an omitted variable bias; second, using a self-reported health variable could induce measurement error; third, the issue of reverse causality arises; and fourth, panel attrition driven by the endogenous decision to participate in the labour market may result in inconsistent estimation. By using recently developed methods, I control for all of the above issues in one framework. The results show that good health raises wages for both women and men. I find the health variable to suffer from measurement error. For men, applying OLS or 2SLS, instead of methods accounting for selection and individual heterogeneity, causes an upward bias in the health coefficient. Selection tests indicate panel attrition to generate biased estimates in the male sample, while for females no selection correction is required.