Bivariate Probit Model Research Articles

Smallholders’ willingness to pay for ZM-GrowTM foliar fertilizer in Dangla District of Northwestern Ethiopia

ABSTRACT Using primary data collected from 389 sample households in Dangla district, Amhara region of Ethiopia, this study examined smallholder farmers’ willingness to pay for ZM-GrowTM foliar fertiliser. The study employed the Tobit model to estimate the determinants of the maximum willingness to pay and a seemingly unrelated bivariate probit model to estimate the mean willingness to pay for foliar fertiliser. The results of the Tobit regression model showed that the education level of the farm household, total annual income, access to credit service, access to agricultural extension service, perception about fertiliser, and cost of the existing fertiliser have a positive and significant effect on farm households’ willingness to pay. On the other hand, the age of farm households, availability of labour, and initial bid price have negative and significant effect on farm households’ willingness to pay for ZM-GrowTM foliar fertiliser. The mean willingness to pay for ZM-GrowTM foliar fertiliser, estimated using the seemingly unrelated bivariate probit model, was 121.16 birr/litre (2.75 USD/litre). The corresponding mean willingness to pay amount estimated from an open-ended format was 161.105 Birr/litre (3.65 USD/litre). The results suggest that foliar fertilisers could be good alternatives to the existing fertilisers and its adoption can be further facilitated through improved access to knowledge and finance/credit.

Factors Influencing Informal Credit Access and Utilization among Smallholder Farmers: Insights from Mountainous Regions of Pakistan

Access to credit plays an important role in the adoption of modern agricultural practices, such as better seeds, pesticides, and fertilizers, as well as in the sustainable utilization of land by smallholder farmers. This study explores the dynamics of smallholders’ access to and utilization of informal credit to manage local farming systems. The data were collected from rural households in the Dir Kohistan mountainous region of Pakistan in 2021. A bivariate probit model was employed to analyze the data from 300 randomly selected farming households. Our findings indicate that a significant proportion of respondents (70%) reported having access to informal credit, with 65% actively utilizing credit to bolster the economic viability of their farms. This study reveals various strategies that farmers employ in response to credit constraints. The majority of farmers (69%) prioritize meeting their own farm/household needs. Social networks, particularly friends, emerge as key sources of informal credit (58.1%). The results of the bivariate probit regression analysis identify positive relationships with fellow farmers and neighbors/relatives, along with a lower perceived risk, as the most significant factors influencing access to and utilization of informal credit. Therefore, our study recommends the promotion of relationships and linkages among farmers through facilitated networking events, introducing risk mitigation measures and promoting financial literacy programs to empower smallholder capacities on the credit market. Policymakers are urged to recognize the role of social relationships and consider policies that promote community credit practices for the overall financial well-being of farmers, especially in more isolated mountain areas.

Gender differentials in primary processing and market participation by mopane worm harvesters in Zimbabwe: insights from the COVID-19 pandemic phase

BackgroundGender disparities in access to inputs, markets, financial inclusion, and participation in strategic value chains are major developmental challenges in emerging economies. Participation in the edible insect value chain has become an essential source of income, food, and nutrition in some African countries. This paper uses a bivariate probit model to examine the gender differentials for primary mopane worm harvesters’ participation in primary processing and market participation during COVID-19 in Southeastern Zimbabwe. Using a structured questionnaire, the data were gathered from 393 primary harvesters in five purposively selected wards in the Gwanda District of Zimbabwe. This study examines the gender differentials for primary mopane worm harvesters’ participation in primary processing and market participation during COVID-19 in Southeastern Zimbabwe.ResultsResults show that women are likelier to participate in primary value addition to preparing for the lean season opportunities. There are gender differentials in the participation in markets during COVID-19. Results show a significant negative relationship between participants' ages and female engagement in mopane processing and a positive correlation with female involvement in lean COVID-19 season marketing. Male harvesters’ participation in the lean market during the COVID-19 pandemic was significantly correlated positively with age and education level, while the choice to participate in the lean market was negatively correlated with the dependency ratio.ConclusionsCollaborative, community-centric, and gender-accommodative development of the mopane worm value chain is important. Focal issues are on supporting primary value addition for lean season market participation and during market shocks such as COVID-19. This can be a leap towards gender equality and improving livelihoods of women and men in mopane harvesting areas. The study recommends marketing and district-specific policies explicitly addressing mopane worm harvesting and marketing affects market participation and primary value-addition decisions.

Factors affecting seeking psychological and psychiatric support for Turkish society.

The increase in mental health issues and awareness among individuals, compared to previous times, has contributed to recognizing this as a significant public health issue. The necessity to explore potential factors behind mental health problems has become paramount and served as the primary impetus for the current research endeavor. This study aims to explore if there is a relationship between attitudes toward seeking psychological and psychiatric support. a significant relationship between sociodemographic factors and individuals' tendency to seek psychological and psychiatric help, and if so, in what direction are these relationships? and a significant relationship between individual and social factors and individuals' tendency to seek psychological and psychiatric help, and if so, in what direction are these relationships? Microdata from the Turkey Health Survey, conducted by the Turkish Statistical Institute and representative of Turkey, was used as the dataset. Increased the representative power of the data set over the universe by weighting the data set, and the Bivariate Probit Model was used to address the research questions. As a result of the study, various sociodemographic (gender, age, employment status, et al.), individual and social factors (general health status, participation in social activities, alcohol use et al.) may influence individuals' inclinations toward seeking psychological and psychiatric assistance. The research offers valuable insights for social policymakers and researchers into the behavioral tendencies of individuals seeking professional psychiatric help.

The bright side of controlling owners in emerging markets: the case of corporate fraud

ABSTRACT This paper sheds light on the monitoring effects of controlling ownership on shareholders’ fraud activities. Using a sample of Chinese listed firms for 2004–2019, our results indicate that the absence of controlling owners increases corporate fraud activities by non-controlling shareholders, but not by managers. The findings remain consistent when using bivariate probit model that incorporates undetected fraud. To establish causality, we conduct difference-in-difference analyses that rely on the ownership variation generated by the exogenous loss of controlling owners and M&A deregulation shocks, respectively. The 2SLS regression employing the collectivist culture as an instrument for control absence confirms our results. To explore the reasons for the increase in fraud due to the absence of controlling owners, we show that shareholders are not motivated to participate and vote in the general meetings when controlling owners are absent, resulting in lower corporate governance quality. However, analysts and short-sellers act effectively as external control mechanisms to prevent corporate fraud when controlling owners are absent.

Health insurance system fragmentation and COVID-19 mortality: Evidence from Peru.

Peru has a fragmented health insurance system in which most insureds can only access the providers in their insurer's network. The two largest sub-systems covered about 53% and 30% of the population at the start of the pandemic; however, some individuals have dual insurance and can thereby access both sets of providers. We use data on 24.7 million individuals who belonged to one or both sub-systems to investigate the effect of dual insurance on COVID-19 mortality. We estimate recursive bivariate probit models using the difference in the distance to the nearest hospital in the two insurance sub-systems as Instrumental Variable. The effect of dual insurance was to reduce COVID-19 mortality risk by 0.23% compared with the sample mean risk of 0.54%. This implies that the 133,128 COVID-19 deaths in the sample would have been reduced by 56,418 (95%CI: 34,894, 78,069) if all individuals in the sample had dual insurance.

Smallholder farmers’ willingness to pay for improved irrigation water use: the case of Menz Mama Midir Woreda in North Shewa Zone of Amhara National Regional State, Ethiopia

ABSTRACT The water use practices in Menz Mama Midir woreda are very traditional and inefficient. To lessen this problem, water pricing (valuation) has been considered to be a promising tool. This study, therefore, examined smallholder farmers' willingness to pay and determinants affecting their decisions to pay for improved irrigation water use in Menz Mama woreda, North Shewa zone, Amhara national regional state of Ethiopia. Cross-sectional data collected from 215 randomly sampled irrigation beneficiaries were used for analysis. The mean WTP from double bounded dichotomous elicitation method ranges from 164.027 Birr (4.17 USD) to 221.059 Birr (5.62 USD) per year per hectare of irrigable land. The result from the seemingly unrelated bivariate probit model estimation revealed that the sex of the household head, total annual farm income, size of irrigable landholdings of the household, frequency of extension contacts, amount of credit, and dissatisfaction with the existing irrigation service positively and significantly influenced farmers' WTP decisions. In contrast, off-farm income and bid values were negatively related to WTP decisions. Therefore, the aforementioned factors affecting farmers' decisions to pay should be taken into consideration when constructing irrigation schemes in the study area and areas with similar economic and socio-cultural settings.

Overconfidence, short selling, and corporate fraud: Evidence from China

Using data on Chinese A-share listed firms from 2010 to 2020, this study employs a partial observable bivariate probit model and introduces fraud triangle theory to explain the mechanisms of overconfidence, short selling, and corporate fraud. Our findings show that overconfidence offers rationalization to investors and corporations, reduces fraud detection, and increases corporate incentives to commit fraud. Short selling promotes information transparency, increases fraud detection, and reduces the opportunities to commit fraud. Moreover, it moderates the relationship between overconfidence and corporate fraud. In addition, overconfidence and short selling affect different types of fraud (operational, executive, and information disclosure fraud). Furthermore, our results show heterogeneity among the ownership types. This study provides a theoretical basis for corporate fraud governance in China’s stock market.

Bayesian probability revision and infection prevention behavior in Japan: A quantitative analysis of the first wave of COVID-19

The relationship between cognitive biases and infection prevention behavior remains unexplored in the existing literature. This study uses data from a questionnaire survey conducted in Japan on the first wave of Coronavirus Disease 2019 (COVID-19) from February to May 2020 to empirically investigate the impact of Bayesian probability inference, the influence of cognitive biases of PCR test results on infection prevention behavior, and the discrepancy between infection prevention intentions and behaviors. We used a bivariate ordinal probit model when considering the correlation between behaviors. The results showed that the higher probability responses, implying pessimistic biases, were more likely to indicate that declaring a state of emergency was necessary and effective, and were more health-oriented in ensuring infection prevention behavior even at the expense of the economy. However, the study found that although they wanted to reduce the frequency of their outings and the number of people they met, they did not reduce them in terms of actual behavior change. It also found that those with pessimistic biases had a higher WTP for the vaccine.

Joint Estimation of Ride-Hailing Services (RHS) Adoption and Frequency: Assessing Impacts of Built Environment on Work and Discretionary Trips

In recent years, ride-hailing services (RHS) (also known as on-demand ride services), such as Uber, Ola, Lyft, Didi, etc., have transformed the urban transportation environment. RHS promises to promote sustainable urban mobility as it combines the flexibility of personal vehicles and the shared nature of public transport. In developing countries like India, research on these emerging RHS is still in its infancy, and the role of the built environment (BE) in influencing RHS choice and usage has not been explored. The current study aims to do so, for the city of Kolkata, India which has the highest modal share of ride-hailing amongst million-plus cities in India. Revealed preference (RP) household surveys were conducted, and information on 841 ride-hailing user trips was collected and a semi-ordered bivariate probit model was developed to estimate RHS adoption and usage frequency simultaneously. Model results show that BE variables like destination accessibility, bus stop density, road density, and population density significantly influence the adoption of RHS and use frequency of RHS with varied intensity for work and discretionary trips. Users residing in neighbourhoods with higher accessibility and better public transit connectivity are the least likely to adopt RHS and are also likely to be infrequent users. On the other hand, individuals living in high-density neighbourhoods are more likely to adopt RHS. Also, with increasing distances between origin and destination, commuters tend to adopt and use RHS frequently.

Does the form of state ownership and political connections influence the incidence of financial statement fraud?

Do forms of state ownership and politically connected senior management affect the incidence of financial statement fraud? In this study, we consider these questions and provide new evidence as to the factors influencing fraud commission and detection for Chinese listed firms between 2007 and 2018. Six major types of financial statement fraud activities are identified. Using a bivariate probit model, developed to address partial observability concerns, we report state ownership lowers the likelihood of fraud detection, while increasing a firms’ propensity to commit fraud. In addition, state-owned enterprises (SOEs) controlled by local government are more likely to engage in fraud and escape regulatory punishments, relative to SOEs controlled by central government. The effect of politically connected senior management over fraud commission or regulatory detection is also diluted by the presence of state ownership. Moreover, the role of state ownership in encouraging fraud commissions and escaping from regulatory punishments is more pronounced for the local non-politically connected SOEs.

Corporate fraud and independent director's re‐appointment: Information hypothesis or favouritism hypothesis?

AbstractUsing the analytical framework of social identity theory, this paper explores how a special corporate governance arrangement in the Chinese capital market, i.e., independent directors' re‐appointment, affects corporate ethical behaviours. Using the bivariate probit model, we find that independent directors’ re‐appointment significantly increases corporate fraud propensity, indicating that the favouritism towards re‐appointed independent directors by firms generated from social identity plays a dominant role in the corporate governance outcome in a relationship‐based society. Our results remain consistent after using an exogenous shock to alleviate the endogenous problems. The policy implication of this paper is that the corporate arrangement of re‐appointed independent directors in the Chinese capital market may impair stakeholders’ benefit and weaken business ethics. Top‐level institutional design should be improved and consider thoroughly the effects of social identity on corporate governance outcomes.

The zero-debt puzzle in BRICS countries: Disentangling the financial flexibility and financial constraints hypotheses

This study analyzes the zero-debt decisions of BRICS firms using a bivariate probit model. The leading hypotheses are financial flexibility and financial constraints. On the demand-side, our findings reveal that managerial debt aversion, early lifecycle stage, growth opportunities, solvency, and concentrated ownership contribute to the lack of debt. Similarly, a country's institutional quality correlates with firms' debt-free status. On the supply-side, creditors fund companies with poor financial records in countries with robust markets and economic freedom. Financial flexibility and restrictions leading to zero debt are linked to firm and institutional characteristics in emerging countries.

Adoption of digital payment platforms and trade credit activities among informal firms in Ghana

This study investigates the relationship between the utilisation of digital payment platforms and the decision of informal firms to engage in the demand for or supply of trade credit. Recognizing the pivotal role of trade credit in alleviating financial constraints for informal enterprises, our research employs a recursive bivariate probit model to assess the impact of digital payment platform usage on both the demand for and supply of trade credit among informal firms in Ghana. Leveraging data from the World Bank Enterprise Survey, we find that 13.83 % of informal firms receive trade credit from suppliers, while 26.89 % extend trade credit to customers. Additionally, 49.6 % of firms use digital payment platforms for their business transactions. The study finds that digital payment platforms increase the probability of firms engaging in the demand and supply of trade credit. It argues that digital payments enhance transaction efficiency, convenience, and security, potentially reducing associated transaction costs and facilitating business interactions across distant locations. Various factors, including firm age, maintenance of accounting records, sales volume, owner experience, credit facilities, internet use for social media marketing, and operating hours, significantly influence the decision to engage in trade credit activities. The robustness of our results is confirmed through alternative estimation techniques. Recommendations include policy interventions aimed at promoting the digitalization of informal firms, supported by government investments in digital infrastructure. It is recommended that firms and their suppliers and customers should adopt these digital payment platforms in order to facilitate their use of trade credit in business transactions. A regulatory environment fostering business trust and responsible use of digital payment platforms is crucial, necessitating measures to ensure data protection, security, and ethical conduct within the digital payments’ ecosystem.

Returnee executives and corporate fraud: Evidence from China

AbstractWhether and when returnee executives influence corporate fraud remains an important unresolved theoretical and practical problem. Referencing upper echelons theory and the literature on managerial discretion, we propose that firms with more returnee executives are more likely to engage in corporate fraud. In addition, we propose that the relation between returnee executives and corporate fraud is subject to organizational indicators that reflect executives’ managerial discretion. Specifically, we propose that long‐term performance surplus and corporate visibility diminish the positive impact of returnee executives on corporate fraud. We use privately controlled Chinese public firms, including 11,519 firm‐year observations of 2215 privately controlled Chinese public firms from 2010 to 2021, as our research object and adopt a bivariate probit model to investigate our theoretical assumptions. Our test results are consistent with our predictions. This study enhances the existing understanding of the dark side of returnee executives from a corporate fraud perspective.

Deconstructing subjective unmet healthcare needs: a South Korean case study with policy implications.

Despite widespread efforts by many countries to reduce the prevalence of unmet healthcare needs within their populations, there remains a scarcity of research systematically exploring the components of these needs. This study aims to deconstruct subjective unmet healthcare needs into two distinct components: the experience of subjective healthcare needs (the "Needs" component) and the experience of unmet needs contingent on those healthcare needs (the "Unmet" component). This analysis utilizes data from 13,359 adults aged 19 or older, collected through the 2018 Korea Health Panel survey, with the aim of minimizing the influence of the coronavirus disease 19 pandemic. The two dependent variables are the experience of subjective healthcare needs and whether these needs have been met. The independent variables include 15 socio-demographic, health, and functional characteristics. The study employs both a population proportion analysis and a multivariable bivariate probit model with sample selection. In South Korea, 11.6% (CI [confidence interval] = 11.0-12.3%) of the population experienced subjective unmet healthcare needs. Upon deconstructing these, 96.7% (CI = 96.2-97.1%) of the population exhibited the Needs component, and 12.0% (CI = 11.4-12.7%) displayed the Unmet component. Each independent variable showed different associations between the two components. Furthermore, effective interventions targeting the characteristics associated with each component could reduce the proportion of the population experiencing subjective unmet healthcare needs from 11.6 to 4.0%. South Korea faces a significant challenge due to the considerable prevalence of subjective unmet healthcare needs. To address this challenge effectively, the universal healthcare coverage system should adapt its approach based on the characteristics associated with both the Needs and Unmet components of subjective unmet healthcare needs. To achieve this goal, it is highly recommended that the government prioritize strengthening community-based primary healthcare, which currently suffers from insufficient resources.

Determinants of farmers’ willingness to pay for irrigation improvements in Northcentral Ethiopia

Investing in agricultural water management by improving irrigation schemes helps to establish climate-resilient and sustainable agri-food systems, thus contributing to sustainable poverty reduction. The purpose of this study was to identify the determinants of farmers’ willingness to pay (WTP) for irrigation water improvements in Northcentral Ethiopia. Primary data collected from a random sample of 132 households were analyzed using the double-bounded contingent valuation method and binary logit regression model to identify what determines farmers’ WTP for irrigation improvement. The findings show that farmers’ mean WTP for irrigation water improvements is 141.60 Birr/ha/year (2.50 USD/ha/year). The results of bivariate Probit model revealed that crop type, education, relative location to the irrigation scheme, irrigated plot size, and perceived drought risk statistically and positively determine farmers’ WTP for irrigation water improvement. These findings offer valuable policy implications on how best to guide practical agricaltural water management. Policy interventions aimed at enhancing farmers' behavior, awareness, and perception of drought-related issues, while also promoting cash crop production, are likely to drive more farmers towards a positive WTP for irrigation water improvement.

Digitization, Automation, Network Externalities, and Effectiveness - Firm-level Evidence from Taiwan

This study utilizes constructed firm-level panel data encompassing Taiwanese manufacturing firms from 1999, 2000, and 2002. We endeavor to examine the relationship between the adoption of digital and automated technologies by applying the seemingly unrelated bivariate probit model. Furthermore, digital capital possesses a distinctive characteristic that sets it apart from traditional inputs-it has the potential to generate significant economic externalities. Consequently, in addition to incorporating the relationship between the adoption of digital and automated technologies into our model, this study also investigates the e-commerce externalities within and between industries.

Integrated adoption of controlled grazing and multipurpose fodder trees for enhancing tree cover in dryland farming systems

CONTEXTIntegration of agroforestry with sustainable grazing systems can enhance tree cover in a given landscape. This integration could have a significant economic and ecological impact especially in dryland farming systems. Despite this, the integration is challenged by the lack of combined adoption of both agroforestry and sustainable grazing. OBJECTIVEIn this study, we first examined the factors that determine the integrated adoption of controlled grazing (CG) and multipurpose fodder trees (MFT). More importantly, we investigated whether the integrated adoption of CG and MFT enhances tree cover in dryland farming systems. METHODSBased on primary data collected from a randomly-selected sample of farm households, we used an IV approach to probe into the integrated effect of adopting CG and MFT on tree cover. On the other hand, the bivariate probit model was used to identify the factors that affect the adoption of both CG and MFT. RESULTS AND CONCLUSIONOn average, adopters of both CG and MFT were found to have higher levels of tree abundance and density on their farms. Our model analysis indicates that these higher levels of tree abundance and density are positively related to the integrated adoption of CG and MFT. While the integrated adoption of CG and MFT had a stronger effect, separate adoption of CG or MFT was also correlated with tree abundance. These results generally indicate the importance of integrated silvopastoral systems not only as sustainable livestock management systems but also as promoters of vegetation (tree cover). SIGNIFICANCEGiven the economic and ecological importance of the integrated adoption of CG and MFT, factors that were found to influence integrated adoption including access to improved livestock breeds, skill development (both agroforestry and livestock management training), and agricultural services (such as irrigation and water sources) could give policy a useful direction for targeting and promoting the uptake of such integrated silvopastoral systems both for improving farmers' livelihoods and ecological sustainability.

Innovation and entrepreneurship of Chinese returning migrant workers in their home region

This study aims to investigate the influence of pre-entrepreneurial career mobility frequency and job changes among returning migrant workers (RMWs) on the innovation level of enterprises, with a particular focus on the mediating role of urban social capital accumulated by RMWs. Using data from the “current entrepreneurial status of RMWs”, we applied an ordered probit model to validate our hypotheses. To address endogeneity, a recursive bivariate probit model was used, and stepwise regression combined with bootstrap methods was employed to ascertain the mediating influence of urban social capital. Our results demonstrate a significant positive correlation (P < 0.01) between pre-entrepreneurial career mobility frequency and the innovation level of enterprises among RMWs. However, there's a notable negative correlation (P < 0.01) between experiences as elementary workers and enterprise innovation level, while technical and marketing roles correlate positively (P < 0.01) with enterprise innovation level. Urban social capital mediates the relationship between career mobility and enterprise innovation level, suggesting that career mobility enhance urban social capital accumulation, influencing RMWs' enterprise innovation levels. This empirical evidence holds even after robustness tests. We further observed that RMWs with fewer than three career moves lean towards low level of enterprise innovation, while those with three or more gravitate towards high level of enterprise innovation. This study advances the theory of career mobility and enriches the understanding of enterprise innovation levels. Additionally, it provides critical theoretical insights for prospective RMWs entrepreneurs in strategizing their career mobility and job changes. Policy implications suggest that, in addition to providing entrepreneurial support, the government should facilitate pre-entrepreneurial career mobility channels for migrant workers and consider the transition from rural to urban employment as a socialized ritual for RMWs engaging in entrepreneurship.