Having problem correctly estimating a 3sls system of equation with Instrumental variables.

Hello

I'm currently doing my dissertation in Economics and chose from a topics list at my university to do mine on macroeconomic interdependence. More Specifically, weather FDI stock causes business cycle synchronization. I measured FDI intensity and business cycle syncronisation and other things among sample of 15 countries for a total of 76 country pairs. I chose to use a system of equations similar to Trade, Finance and Specialization by Imbs (2004) https://www.imf.org/external/np/res/...l/pdf/imbs.pdf.

The systems of equations is

(Business Synchronization) _{i j} = (Trade Intensity)_{i j} + (FDI Intensity)_{i j} + (Structural Dissimilarity) + Z_{1i j} + u _{i j}

(FDI Intensity)_{i j} = (Trade Intensity)_{i j} +(Structural Dissimilarity)_{i j} + Z2_{i j} + u _{i j}

(Trade Intensity) _{i j} = (FDI Intensity)_{i j} + (Structural Dissimilarity)_{i j} +Z_{3 i j} +u _ij

(Structual Dissimilarity) _{i j} = (FDI Intensity)_{i j} +(Trade Intensity)_{i j} + Z4 _{I J} +u _{i j}

Where i denotes country I . j denotes country j. Z Denotes exogenous determinants of the dependent variable for that equation

When trying to estimate the model using 3sls with the 3reg command, I noticed I cant pick an instrument for each individual endogenous variable. How can I estimate the system of equations using a different instrument for each endogenous variable?

Thanks

Mark

Share on FacebookPlus on Google+