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Efficiency of QMLE for dynamic panel data models with interactive effects

Jushan Bai

arXiv 13 Dec 2023 · Econometrics · publishedJournal of the American Statistical Association (2025) · 1 citations (OpenAlex)

arXiv:2312.07881 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper studies the problem of efficient estimation of panel data models in the presence of an increasing number of incidental parameters. We formulate the dynamic panel as a simultaneous equations system, and derive the efficiency bound under the normality assumption. We then show that the Gaussian quasi-maximum likelihood estimator (QMLE) applied to the system achieves the normality efficiency bound without the normality assumption. Comparison of QMLE with the fixed effects approach is made.

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26
references
51
in-text mentions
26
distinct cited
7
self-citations
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Bai, J (2024) Likelihood approach to dynamic panel models with interactive effects self0.92843100%
2Iwakura, H. and R. Okui (2014) Asymptotic efficiency in factor models and dynamic panel data models, Institute of Economic Research, Kyoto University, Availabl…0.874102100%
3Anderson, T. W (2003) An Introduction to Multivariate Statistical Analysis, 3rd ed0.73732100%
4van der Vaart, A.W. and J.A. Wellner (1996) Weak Convergence and Empirical Processes with Applications to Statistics, Springer-Verlag0.64441100%
5Bai, J (2009) Panel data models with interactive fixed effects, Econometrica, 77 1229-1279 self0.64422100%
6Bai, J (2013) Fixed effects dynamic panel data models, a factor analytical method, Econometrica, 81, 285-314 self0.64422100%
7Bai, J. and K.P. Li (2012) Statistical analysis of factor models of high dimension self0.64422100%
8Moon H.R. and M. Weidner (2017) “Dynamic Linear Panel Regression Models with Interactive Fixed Effects", Econometric Theory 33, 158-1950.64422100%
9Moreira, M.J (2009) A Maximum Likelihood Method for the Incidental Parameter Problem, Annals of Statistics, 37, 3660-36960.64422100%
10Hahn, J., and G. Kuersteiner (2002) “Asymptotically Unbiased Inference for a Dynamic Panel Model with Fixed Effects when Both n and T Are Large," Econometrica, 70,…0.51121100%

Showing the top 10 of 26 scored citations.