Specification test for fixed effects in binary panel data model: a simulation study

Authors : Gang YU, Weiguo WANG, Maozu LU, Shaoping WANG

Pages : 755-760

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Publication Date : 2015-06-01

Article Type : Research Paper

Abstract :In this paper, we examine the specification tests which have been proposed for fixed effects in binary panel data model, using several different data generating processes to evaluate the performance of the specification test in different situations. By simulations, we find the specification test based on moment conditions is able to outperform the Lagrange multiplier test proposed by Gurmu [5].
Keywords : Specification test, Fixed effects, Binary panel data