System of Equations

  • Hubert GatignonEmail author


In this chapter, we consider the case where several dependent variables are explained by linear relationships with other variables. Independent analysis of each relationship by ordinary least squares Ordinary Least Squares OLS could result in incorrect statistical inferences either because the estimation is not efficient (a simultaneous consideration of all the explained variables may lead to more efficient estimators for the parameters) or may be biased in cases where the dependent variables influence each other.


Covariance Matrix Exogenous Variable Endogenous Variable Efficient Estimator Strategic Management Journal 
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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.INSEAD, The Business School for the WorldFontainebleau CedexFrance

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