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Monte Carlo studies have shown that estimated asymptotic standard errors of the efficient two-step generalised method of moments (GMM) estimator can be severely downward biased in small samples. The weight matrix used in the calculation of the efficient two-step GMM estimator is based on initial consistent parameter estimates. In this paper it is shown that the extra variation due to the presence of these estimated parameters in the weight matrix accounts for much of the difference between the finite sample and the usual asymptotic variance of the two-step GMM estimator, when the moment conditions used are linear in the parameters. This difference can be estimated, resulting in a finite sample corrected estimate of the variance. In a Monte Carlo study of a panel data model it is shown that the corrected variance estimate approximates the finite sample variance well, leading to more accurate inference.
Monte Carlo studies have shown that estimated asymptotic standard errors of the efficient two-step generalised method of moments (GMM) estimator can be severely downward biased in small samples. The weight matrix used in the calculation of the efficient two-step GMM estimator is based on initial consistent parameter estimates. In this paper it is shown that the extra variation due to the presence of these estimated parameters in the weight matrix accounts for much of the difference between the finite sample and the asymptotic variance of the two-step GMM estimator that utilises moment conditions that are linear in the parameters. This difference can be estimated, resulting in a finite sample corrected estimate of the variance. In a Monte Carlo study of a panel data model it is shown that the corrected variance estimate approximates the finite sample variance well, leading to more accurate inference.
We compare the finite sample performance of a range of tests of linear restrictions for linear panel data models estimated using Generalised Method of Moments (GMM). These include standard asymptotic Wald tests based on one-step and two-step GMM estimators; two bootstrapped versions of these Wald tests; a version of the two-step Wald test that uses a finite sample corrected estimate of the variance of the two-step GMM estimator; the LM test; and three criterion-based tests that have recently been proposed. We consider both the AR(1) panel model, and a design with predetermined regressors. The corrected two-step Wald test performs similarly to the standard one-step Wald test, whilst the bootstrapped one-step Wald test, the LM test, and a simple criterion-difference test can provide more reliable finite sample inference in some cases.
China and India, the two largest developing countries, are developing rapidly both inside themselves and towards global markets. Are these two economies dual or dueling? This 3-volume set tries to answer this question by providing comprehensive analyses scoping varied economic issues.This volume set covers both China's and India's strategies and objectives in international governance, their bilateral and multilateral trade agreement negotiations, financial liberalization, growth prospects, rural development and agriculture, income distribution, labor market mechanism, manufacturing and competitiveness upgrading, as well as environmental and other social issues.The set collects papers (most unpublished until now) written by Chinese and Indian researchers who have rich experiences and strong backgrounds in policy analyses and are well connected to Chinese and Indian policy makers. Thus, these papers contain valuable first-hand information about China's and India's development strategies. This makes this volume set an essential source of reference for China-India comparisons and studies.
Contemporary Issues in Management Development in Africa is jointly published with the University of Ghana Business School in response to the growing importance of Africa in global business discourse. The book spans the broad areas of management development in Africa and addresses a wide variety of issues that are critical for Africa's economic and social development, including their implications for management development. Whilst the book's focus is on recent and contemporary development issues, it situates the discourses within historical contexts. For this, the first section of the book is on the historical review of management development in Africa; section two deals with contemporary management issues while the third section is on the policy and institutional perspectives of management development in Africa. The book is an essential reading for students and scholars of international business, finance, economics, accounting, corporate governance and general management. It should be equally a useful guide for practitioners and policy makers alike.
In this volume, the OECD and the World Bank jointly take stock of how globalisation is posing new challenges for innovation and growth in both developed and developing countries, and how countries are coping with them.
This study contributes to the literature by analyzing the impact of financial inclusion (FI) on various bank risk dimensions, including systemic risk, which has been underexplored. We expand on recent research by examining not only the type of financial services, but also the source of FI, particularly the role of non-commercial banks (NCB). Our findings reveal that contrary to developed countries, credit expansions are linked to lower commercial banking risks, underscoring the benefits of loan diversification in developing and emerging economies,. However, while FI in deposits generally reduces individual banking risks, its effect on systemic risk is weaker in these countries, likely due to limited asset diversification. Moreover, NCBs tend to increase systemic and idiosyncratic risks for commercial banks through competitive pressures in the loan and deposit markets. Our results suggest that coordinating macroprudential policies with credit developments further reduces systemic risk by discouraging excessive risk-taking when banks’ capital is more at stake. Banks with stronger Basel capital ratios show reduced idiosyncratic risks, yet there is evidence that banks may relax these ratios to accommodate lending demands. These insights underscore the necessity for regulators to synchronize macroprudential policies with FI developments and consider NCBs’ role in financial stability.
China's economic growth has transformed the country from one of the poorest in the world to its second largest economy. Understanding the drivers of growth remains elusive as the country is affected by both its transition from central planning and the challenges of a developing country. This book examines the main themes of growth, offering micro level evidence to shed light on the macro drivers of the economy. It also focuses on law and informal institutions of the economy to highlight the importance of entrepreneurship and the development of the private sector.