Campos, Nauro; Kinoshita, Yuko - 2008
measured as FDI as a ratio of GDP in country i at
year t.
11
X
it
includes (i) the classical factors (market size …
equation (1), valid instruments are lagged levels of dependent variables,
sit
Y
−
where 2≥s and
.,...,4,3 Tt = If
it
X … is strictly exogenous, then
sit
X
−
∆ (for all s) can be used as additional
instruments to increase the efficiency of …