Dear Statalists,
My name is Hoang Luong, PhD student at the University of Greenwich, London.
I'm applying GMM for dynamic panel model to investigate the determinants of R&D investment at firm level. One of my explanatory variable is Tobin's Q, and it is an endogenous variable (due to reverse causality). I also want to examine the non-linear relationship of R&D - Tobin's Q as well, by adding the square term of Q into the model. But I'm not sure if I should treat the square term as another endogenous variable or should I treat it as exogenous one (put it in ivstyle). So I just want to ask if anyone can provide me an advice on that issue?
Thank you in advance for reading.
Best,
Hoang Luong
My name is Hoang Luong, PhD student at the University of Greenwich, London.
I'm applying GMM for dynamic panel model to investigate the determinants of R&D investment at firm level. One of my explanatory variable is Tobin's Q, and it is an endogenous variable (due to reverse causality). I also want to examine the non-linear relationship of R&D - Tobin's Q as well, by adding the square term of Q into the model. But I'm not sure if I should treat the square term as another endogenous variable or should I treat it as exogenous one (put it in ivstyle). So I just want to ask if anyone can provide me an advice on that issue?
Thank you in advance for reading.
Best,
Hoang Luong