The posting below is forwarded on before of Naisargik Lenka.
Nick
[email protected]
I have a small doubt regarding ivreg.
I have two equation model which I want to estimate using ivreg.
Equation1: insider ownership=f(market value of equity, corporate
value, other control exogenous vars)
Equation2: corporate value=g(insider ownership, other control
exogenous vars)
Assuming non-linear ownership effects, I want to make spline of
insider ownership say ins1,ins2,ins3 and I want to use these three in
2sls.
What should I do?
Should I first estimate insider ownership using all exogenous and
instrumental variables and then make spline and use these in the
second stage where I modeled corporate value=f(ins1,ins2,ins3)
Or
Should I estimate all ins1,ins2,ins3 separately using exogenous and
instrumental variable and then use these in my second stage of
estimation of corporate value.
Please help me.
*
* For searches and help try:
* http://www.stata.com/support/faqs/res/findit.html
* http://www.stata.com/support/statalist/faq
* http://www.ats.ucla.edu/stat/stata/
