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From |
John Antonakis <John.Antonakis@unil.ch> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: Modeling simultaneity |

Date |
Tue, 05 Feb 2013 19:08:39 +0100 |

Hi Pavlos: You are estimating: abs = b0 + b1Div + b2x1 + e div = g0 + g1abs + g2x2 + u perf = d0 + d1abs + d2div + w

1. Correlations between exogenous variables: 1 2. Correlations between disturbances: 3 3. Regressions coefficients: 6 4. Variances of exogenous variables: 2 5: Variances of endogenous variables: 3 Total parameters estimated: 15

You can estimate this system of equations with reg3, as follows: reg3 (abs div x1) (div abs x2) (perf abs div), 2sls est store two

reg3 (abs div x1) (div abs x2) (perf abs div), est store three hausman two three If they don't differ you can retain the 3sls estimator.

Or you can do the cov option explicitly:

We discuss these issues in an applied manner here:

HTH, John. __________________________________________ John Antonakis Professor of Organizational Behavior Director, Ph.D. Program in Management Faculty of Business and Economics University of Lausanne Internef #618 CH-1015 Lausanne-Dorigny Switzerland Tel ++41 (0)21 692-3438 Fax ++41 (0)21 692-3305 http://www.hec.unil.ch/people/jantonakis Associate Editor The Leadership Quarterly __________________________________________ On 04.02.2013 15:03, Pavlos C. Symeou wrote:

Dear Statalisters, I was wondering whether any of you can help me with this.I have three variables: Absorptive capacity, Diversification, andPerformance. I am arguing that the first two are simultaneouslydetermined and they influence the third one.Explicitly, I am arguing that the ability of the firm to understandnew knowledge (what is called Absorptive Capacity AC) influences thedirection of the firm's market diversification (DIV). However, oncethe firm has diversified, it in turn influences the firm's ability tounderstand new knowledge (AC). I want to empirically account for thissimultaneity when I try to examine the effect of AC and DIV on theperformance of the firm.I can use instrumental variables to model the simultaneity, but Idon't know how to examine the final effects of AC and DIV on firmperformance while controlling for simultaneity.I look forward to receiving your comments. Best, Pavlos * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

* * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: Modeling simultaneity***From:*"Pavlos C. Symeou" <p.symeou@gmail.com>

**References**:**st: Modeling simultaneity***From:*"Pavlos C. Symeou" <p.symeou@gmail.com>

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