diff --git a/matlab/ols/pooled_fgls.m b/matlab/ols/pooled_fgls.m
index 830257bdc..0b13b6cde 100644
--- a/matlab/ols/pooled_fgls.m
+++ b/matlab/ols/pooled_fgls.m
@@ -55,7 +55,7 @@ for i = 1:maxit
     resid = oo_.pooled_fgls.Y - oo_.pooled_fgls.X * beta0;
     resid = reshape(resid, oo_.pooled_fgls.dof, neqs);
     vcv = resid'*resid/oo_.pooled_fgls.dof;
-    kLeye = kron(chol(inv(vcv)), eye(oo_.pooled_fgls.dof));
+    kLeye = kron(inv(chol(vcv))', eye(oo_.pooled_fgls.dof));
     [q, r] = qr(kLeye*oo_.pooled_fgls.X, 0);
     oo_.pooled_fgls.beta = r\(q'*kLeye*oo_.pooled_fgls.Y);
     if max(abs(beta0 - oo_.pooled_fgls.beta)) < tol
diff --git a/matlab/ols/sur.m b/matlab/ols/sur.m
index a379c42e5..349ca9891 100644
--- a/matlab/ols/sur.m
+++ b/matlab/ols/sur.m
@@ -137,7 +137,7 @@ for i = 1:maxit
     resid = Y.data - X.data * beta0;
     resid = reshape(resid, oo_.sur.(model_name).dof, neqs);
     vcv = resid'*resid/oo_.sur.(model_name).dof;
-    kLeye = kron(chol(inv(vcv)), eye(oo_.sur.(model_name).dof));
+    kLeye = kron(inv(chol(vcv))', eye(oo_.sur.(model_name).dof));
     [q, r] = qr(kLeye*X.data, 0);
     oo_.sur.(model_name).beta = r\(q'*kLeye*Y.data);
     if max(abs(beta0 - oo_.sur.(model_name).beta)) < tol