Dear Statalists,
I am trying to estimate a dynamic growth regression with both endogenous and predetermined variables.
gdp(t) = (1+b)gdp(t-1) + X(t-1) + fe + e(t)
Being a beginner in stata I was wondering if you could help me with the following two questions:
1.) To use difference GMM I use the following command
xtabond gdp, endogenous(x....) pre(lprimary lseconday ltertiary)
where the latter referes to lagged education attainment rates and x for population growth, say.
With this specification I do not seem to pass the Sargan test and was wondering if anyone has a suggestion as to how to reformulate the command to increase my chances of passing the test.
2) My panel (N=89 T=9) is unbalanced. How does xtabond accounts for that / how do I adjust my estimators to use the entire dataset without having to drop unbalanced observations.
many thanks in advance!
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