Testing for spatial correlation under a complete bipartite network

Badi Baltagi and Long Liu

Economics Letters, 2024, vol. 241, issue C

Abstract: This note shows that for a spatial regression with a weight matrix depicting a complete bipartite network, the Moran I test for zero spatial correlation is never rejected when the alternative is positive spatial correlation no matter how large the true value of the spatial correlation coefficient. In contrast, the null hypothesis of zero spatial correlation is always rejected (with probability one asymptotically) when the alternative is negative spatial correlation and the true value of the spatial correlation coefficient is near −1.

Keywords: Spatial error model; Moran I test; Complete bipartite network (search for similar items in EconPapers)
JEL-codes: C12 C21 C31 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Testing for Spatial Correlation under a Complete Bipartite Network (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:241:y:2024:i:c:s0165176524003239

DOI: 10.1016/j.econlet.2024.111839

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