Dear stata users,
I am new to this forum, so first of all I hope I am meeting the requirements of being a good participant. I already scanned the existing posts for my following question but could not find a thread which adressed my question.
I am facing a problem with endogeneitey in calculations of an OLS I am running. I analyze the relation between the implementation of a managerial accounting system and the stock performance on events. The implementation of the managerial accounting system is measured by a ordinal variable ranging from 0 (no implementation at all) to 5 (very sophisticated implementation). As I now want to make sure there is no problem of reverse causality I intend to run the usual 2sls procedure. Independently of the instrument I am going to use, I was wondering how to define the first stage. Do I have to run an "ologit" regression in the first stage to then run an ordinary OLS in the second stage? And if yes, is there a way to account for an ordinally scaled endgoneous variable within ivreg? Unfurtunately results between the "manual" two stage procedure and the ivreg command were not that similar, so I obviously did a mistake on at least one of them.
I would be more than happy if you could help me out somehow as I want to make sure that in the end I am not running "forbidden regressions" or conduct some other servere mistakes. Thank you very much in advance for helping me out!
Best,
Sven
I am new to this forum, so first of all I hope I am meeting the requirements of being a good participant. I already scanned the existing posts for my following question but could not find a thread which adressed my question.
I am facing a problem with endogeneitey in calculations of an OLS I am running. I analyze the relation between the implementation of a managerial accounting system and the stock performance on events. The implementation of the managerial accounting system is measured by a ordinal variable ranging from 0 (no implementation at all) to 5 (very sophisticated implementation). As I now want to make sure there is no problem of reverse causality I intend to run the usual 2sls procedure. Independently of the instrument I am going to use, I was wondering how to define the first stage. Do I have to run an "ologit" regression in the first stage to then run an ordinary OLS in the second stage? And if yes, is there a way to account for an ordinally scaled endgoneous variable within ivreg? Unfurtunately results between the "manual" two stage procedure and the ivreg command were not that similar, so I obviously did a mistake on at least one of them.
I would be more than happy if you could help me out somehow as I want to make sure that in the end I am not running "forbidden regressions" or conduct some other servere mistakes. Thank you very much in advance for helping me out!
Best,
Sven
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