This paper considers a functional-coefficient spatial Durbin model with nonparametric spatial weights. Applying the series approximation method, we estimate the unknown functional coefficients and spatial weighting functions via a nonparametric two-stage least squares (or 2SLS) estimation...

There is near universal agreement that estimates and inferences from spatial regression models are sensitive to particular specifications used for the spatial weight structure in these models. We find little theoretical basis for this commonly held belief, if estimates and inferences are based...