Multivariate Spatial IV Regression

Abstract

In this paper, a Multivariate Spatial Regression model with
 Endogenous Variables 

is proposed. In order to deal
 with endogeneity and spatial dependence,
 

the instrumental variables (IV) methodology and an
 autoregressive spatial structure, 

frequently used in
 econometric applications, are implemented. A Bayesian inference
 

procedure based on simulation schemes designed to
 obtain samples from the 

posterior distribution of
 model parameters is developed. Finally, the methodology
 

is illustrated through an application to the impact
 of broadband access on the 

economic sectors.