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Institutions and growth: evidence from estimation methods robust to weak instruments

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  • Alexandre Dmitriev

Abstract

This article focuses on the empirical approach proposed by Hall and Jones (1999) to estimate the effect of what they call ‘social infrastructure’ on productivity across countries. We consider the issue of weak identification in their linear instrumental variables model. The evidence obtained from partially robust estimators, such as the k -class and jackknife estimators, is interpreted on the basis of Monte Carlo studies. Our findings suggest that using certain k -class estimators allows exclusive reliance on the linguistic variables to instrument for institutional quality despite their low correlation with the endogenous regressor in question.

Suggested Citation

  • Alexandre Dmitriev, 2013. "Institutions and growth: evidence from estimation methods robust to weak instruments," Applied Economics, Taylor & Francis Journals, vol. 45(13), pages 1625-1635, May.
  • Handle: RePEc:taf:applec:45:y:2013:i:13:p:1625-1635
    DOI: 10.1080/00036846.2011.633892
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    References listed on IDEAS

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    Cited by:

    1. Marine Carrasco & Guy Tchuente, 2016. "Efficient Estimation with Many Weak Instruments Using Regularization Techniques," Econometric Reviews, Taylor & Francis Journals, vol. 35(8-10), pages 1609-1637, December.

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