Hello All,
I have a model where I have double selection process. Firms in my model
make two related strategy decisions. One selection process is whether to
outsource or not and second is whether to offshore or not.
Can I compute two separate probit models and their inverse mills ratio
and add the two ratios to the OLS (outcome) regression? Or should I use a
multinomial logit (four strategies- inhouse, domestic outsourcing,
offshore outsourcing and affiliates) and then do the second stage outcome
equation.
Also, can I use multivariate regression instead of the OLS in the second
stage?
I would really appreciate your help. Thank you.
Pooja Thakur
Doctoral Candidate
Rutgers Business School
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