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Bibliographic Details
Main Authors: Hahn, Jinyong, Liao, Zhipeng, Menzel, Konrad, Vuong, Quang
Format: Preprint
Published: 2026
Subjects:
Online Access:https://arxiv.org/abs/2601.22354
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Table of Contents:
  • This paper generalizes the classical Vuong (1989) test to panel data models by employing modified profile likelihoods and the Kullback-Leibler information criterion. Unlike the standard likelihood function, the profile likelihood lacks certain regular properties, making modification necessary. We adopt a generalized panel data framework that incorporates group fixed effects for time and individual pairs, rather than traditional individual fixed effects. Applications of our approach include linear models with non-nested specifications of individual-time effects.