A powerful 2SLS testing approach

Funding Information: The authors thank the Co-Editor, Michael Jansson, an Associate Editor and two anonymous referees for their helpful and constructive comments. We also thank participants of the IAAE Annual conference 2023 at the BI Norwegian Business School, Oslo, Norway, and seminar participants at the University of the Balearic Islands, Palma de Maiorca, Spain for their comments. Demetrescu gratefully acknowledges the support of the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation) through grant 531866675 . Rodrigues thanks the Portuguese Science Foundation (FCT) for financial support through project PTDC/EGE-ECO/7493/2020, and (UID/ECO/00124/2013 and Social Sciences DataLab, Project 22209), POR Lisboa (LISBOA-01-0145-FEDER-007722 and Social Sciences DataLab, Project 22209) and POR Norte (Social Sciences DataLab, Project 22209). Taylor gratefully acknowledges financial support provided by the U.K. Economic and Social Research Council under research grant ES/R00496X/1 . Publisher Copyright: © 2025 The Authors