2011
DOI: 10.1080/02664760903406462
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Multicollinearity and financial constraint in investment decisions: a Bayesian generalized ridge regression

Abstract: This paper addresses the investment decisions considering the presence of financial constraints of 373 large Brazilian firms from 1997 to 2004, using panel data. A Bayesian econometric model was used considering ridge regression for multicollinearity problems among the variables in the model. Prior distributions are assumed for the parameters, classifying the model into random or fixed effects. We used a Bayesian approach to estimate the parameters, considering normal and Student t distributions for the error … Show more

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Cited by 6 publications
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“…Bayesian ridge regression (BRR) is a machine learning regression algorithm based on Bayesian theory [11,12]. Bayesian linear regression is shown in Equation (3).…”
Section: Bayesian Ridge Regressionmentioning
confidence: 99%
“…Bayesian ridge regression (BRR) is a machine learning regression algorithm based on Bayesian theory [11,12]. Bayesian linear regression is shown in Equation (3).…”
Section: Bayesian Ridge Regressionmentioning
confidence: 99%