Error component two-stage least squares. Verify that GLS on (7.10) yields the EC2SLS estimator of (delta_{1}) given
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Error component two-stage least squares. Verify that GLS on (7.10) yields the EC2SLS estimator of \(\delta_{1}\) given in (7.11) (see Baltagi (1981b)).
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X'y X'y Xx) = (x) 8 + X' X'u (7.10)
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