A NOTE ON CHALLENGES AND SOLUTIONS FOR ENDOGENEITY IN CORPORATE FINANCE
- Oluseun Paseda
- Adeola Adenikinju
- ( paper pages. 341 - 366 )
Abstract
Endogeneity is a pervasive issue in empirical
corporate finance, leading to biased and inconsistent parameter estimates that
undermine the reliability of inferences. This paper explores the sources of
endogeneity, its implications, and the econometric techniques used to address
it. We review omitted variables, simultaneity, and measurement error as primary
sources of endogeneity and discuss methods such as instrumental variables,
difference-in-differences estimators, regression discontinuity design, matching
methods, and panel data techniques.
Citation
Oluseun Paseda, Adeola Adenikinju.
2025.
"A NOTE ON CHALLENGES AND SOLUTIONS FOR ENDOGENEITY IN CORPORATE FINANCE"
The Nigerian Journal of Economic and Social Studies,
67 (2): 341 - 366.
JEL Classification
G30, C21, C23
