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Robust Estimation and Inference for High-Dimensional Panel Data Models

Jiti Gao, Fei Liu, Bin Peng, Yayi Yan

arXiv 13 May 2024 · Econometrics · 1 citations (OpenAlex)

arXiv:2405.07420 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper provides the relevant literature with a complete toolkit for conducting robust estimation and inference about the parameters of interest involved in a high-dimensional panel data framework. Specifically, (1) we allow for non-Gaussian, serially and cross-sectionally correlated and heteroskedastic error processes, (2) we develop an estimation method for high-dimensional long-run covariance matrix using a thresholded estimator, (3) we also allow for the number of regressors to grow faster than the sample size. Methodologically and technically, we develop two Nagaev--types of concentration inequalities: one for a partial sum and the other for a quadratic form, subject to a set of easily verifiable conditions. Leveraging these two inequalities, we derive a non-asymptotic bound for the LASSO estimator, achieve asymptotic normality via the node-wise LASSO regression, and establish a sharp convergence rate for the thresholded heteroskedasticity and autocorrelation consistent (HAC) estimator. We demonstrate the practical relevance of these theoretical results by investigating a high-dimensional panel data model with interactive effects. Moreover, we conduct extensive numerical studies using simulated and real data examples.

Citation extraction

34
references
68
in-text mentions
34
distinct cited
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self-citations
9,556
main-text words

appendix boundary found by appendix_titled_section at “Appendix A” · 22% of the source is main text. Read the extracted text to check this.

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
1Babii, Ball, Ghysels \ Striaukas (2023) `Machine learning panel data regressions with heavy-tailed dependent data: Theory and application', Journal of Econometrics 237(…1.00094100%
2Belloni, Chen, Madrid Padilla \ Wang (2023) `High-dimensional latent panel quantile regression with an application to asset pricing', The Annals of Statistics 51(1), 96–1210.9568588%
3Vogt, Walsh \ Linton (2022) `CCE estimation of high-dimensional panel data models with interactive fixed effects', arXiv preprint arXiv:2206.121520.81142100%
4Baek, Düker \ Pipiras (2023) `Local whittle estimation of high-dimensional long-run variance and precision matrices', The Annals of Statistics 51(6), 2386–24140.64422100%
5Zou (2006) `The adaptive lasso and its oracle properties', Journal of the American Statistical Association 101(476), 1418–14290.64422100%
6Chen \ Zimmermann (2022) `Open source cross-sectional asset pricing', Critical Finance Review 27(2), 207–2640.58531100%
7Gao, Peng \ Yan (2023) `Higher-order expansions and inference for panel data models', Journal of the American Statistical Association p. forthcoming0.5112250%
8Kelly, Pruitt \ Su (2019) `Characteristics are covariances: A unified model of risk and return', Journal of Financial Economics 134(3), 501–5240.51121100%
9Pesaran (2021) `General diagnostic tests for cross section dependence in panels', Empirical Economics 60, 13–500.51121100%
10Gupta \ Seo (2023) `Robust inference on infinite and growing dimensional time-series regression', Econometrica 91(4), 1333–13610.51121100%

Showing the top 10 of 34 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Arellano-Bond LASSO Estimator for Dynamic Linear Panel Models$^*$0.40511