Cross-country Panel Data Research Articles

Digital service trade and carbon total factor productivity: empirical evidence from cross-country panel data

Digital service trade and carbon total factor productivity: empirical evidence from cross-country panel data

How does political stability affect renewable energy finance? International evidence

Renewable energy financing (REF) embodies both energy and financial attributes. Despite the extensive attention to the many factors affecting REF, the relationship between political stability and REF remains unclear. Accordingly, this study empirically examines the specific impact of political stability on REF using cross-country panel data from 2002 to 2020. The results indicate that political stability significantly promotes REF, and this conclusion remains robust across various tests, including explanatory variable changes, sample period adjustments, and addressing potential endogeneity issues. Heterogeneity analysis shows that political stability facilitates financing for wind and hydropower and promotes REF in non-OECD and non-OPEC countries. Furthermore, mechanism analysis shows that political stability promotes REF through domestic channels (increased energy demand and reduced investment risk) and international channels (increased foreign capital inflows and international aid). Finally, the industrial and economic endowments of a country exhibit threshold effects, influencing the direct impact of political stability on REF and the mechanisms through which political stability promotes REF. This study furthers the understanding of REF and provides theoretical support for policymakers in different countries to maintain political stability and promote the prosperity of the renewable energy sector.

Income convergence in Central and Eastern Europe: Evidence from cross-country panel data analysis

Income convergence in Central and Eastern Europe: Evidence from cross-country panel data analysis

How does participation in Global Value Chains affect embodied carbon emissions in international trade? New insights from cross-country panel data analysis.

Global Value Chains (GVCs) significantly influence international trade and environmental outcomes. Despite the economic benefits of GVCs, their impact on the environment remains under-examined. This study analyzes the effects of GVC participation (considering forward and backward positions) on total carbon emissions embodied in exports (TEEE) and imports (TEEI). Utilizing panel data from 65 economies spanning 1995 to 2018, we apply input-output matrices and the system generalized method of moments (GMM-SYS) approach. Our results indicate that GVC participation generally is associated with reductions in TEEI and increases in TEEE, with backward participation exerting a more substantial impact. Furthermore, we observed asymmetrical impacts of GVC participation between developed and developing countries. Developed nations tend to reap greater benefits from GVC in terms of diminished CO2 emissions associated with imports, as well as notable CO2 reductions in both exports and imports, particularly when forward participation is the focal point. Conversely, developing countries grapple with heightened environmental burdens stemming from their engagement in backward linkages.

Impact of digital divide on energy poverty across the globe: The mediating role of income inequality

Energy poverty is an important reality facing the whole world, and the rapid development of digital technology has great potential in eradicating poverty. However, the differences in the level of information development have led to the existence of the digital divide within countries. In this context, this paper explores whether and how the digital divide affects energy poverty from a global perspective. Based on cross-country panel data, this study focuses on the effect and asymmetry of the digital divide on energy poverty. The results show that the digital divide hinders the reduction of energy poverty and manifests itself in a Matthew effect that makes the energy poor poorer. Second, the heterogeneity analysis based on income level and rural-urban areas find that the digital divide has a greater negative impact on energy poverty in low-income countries and rural areas. Finally, the mechanism analysis reveals that the digital divide exacerbates energy poverty mainly by increasing income inequality. Therefore, there is a greater need to focus on the efficiency, equity and inclusive development of the digital economy in the process of its globalization. The findings can also provide an empirical basis for policy design to bridge the digital divide and alleviate energy poverty.

The Neighborhood Effects of National Climate Legislation: Learning or Competition?

This study aims to explore the spatial spillover effects of national climate legislation on carbon emission reduction by using cross-country panel data from 2002 to 2021. The results show the following: First, the estimation outcomes confirm the presence of spatial correlations between carbon dioxide emissions and climate legislation across countries. Second, the study shows that the spillover effect of climate legislation on CO2 emissions is significantly negative. Hence, the outcomes indicate that being surrounded by nations with more climate laws positively impacts environmental quality. Third, regarding direct impact and spillover effects, the carbon reduction impact of parliamentary legislative acts is stronger than that of governmental executive orders. Finally, even with the spillover effect, we uncover robust evidence supporting an inverted-U-shaped EKC linkage between carbon emissions and GDP per capita, even under the spatial spillover effect.

Aid for trade and value chain cooperation: evidence from China

ABSTRACT The impact of Aid for Trade (AfT) on the development of global value chains (GVCs) has attracted much attention in recent years. Based on the cross-country panel data of China’s AfT and value chain cooperation (VCC) between China and recipient countries from 2000 to 2016, this paper examines the impact of China’s AfT on VCC between China and recipient countries. The study found that China’s AfT can significantly increase the degree of VCC between China and the recipient countries. Further mechanism tests show that China’s AfT has mainly promoted VCC between China and recipient countries through two channels: improving their infrastructure and reducing trade costs. The research shows that AfT can effectively promote win-win cooperation and common development between donor and recipient countries. In addition, from the perspective of GVCs, aid is effective for developing recipient countries.

Carbon pricing policies and renewable energy development: Analysis based on cross-country panel data

While studies have theoretically discussed the impact of carbon pricing on renewable energy, the practical implementation and effectiveness of these policies remain uncertain. This study empirically examines the role of carbon emissions trading and carbon tax in global renewable energy development using panel data from 196 countries and regions and employing the staggered difference-in-differences (DID) model and Bacon decomposition method. The results suggest that: (1) From the perspective of policy shocks, carbon trading has increased non-hydro renewable electricity generation by 73.32%, while carbon tax has increased it by 31.79%. This indicates that the overall impact of carbon trading on renewable energy is greater than that of carbon tax. However, the elasticity coefficients of renewable energy to carbon trading prices and carbon tax rates are 0.1801 and 0.1845, respectively, suggesting a slightly greater marginal effect of carbon tax on renewable energy compared to carbon trading. (2) Both carbon tax and carbon trading have mitigated the growth of fossil electricity and encouraged public investment in renewable energy, thereby fostering its development. (3) The influence of carbon pricing on renewable energy varies by income level; notably, the implementation of these policies in high-income countries has diminished their promotional effect on renewable energy. (4) The contribution of technological innovation to renewable energy development is smaller than that of policies including carbon trading and carbon tax, indicating that renewable energy development during the sample period was predominantly driven by policy measures. The findings indicate that the application of carbon pricing policies should be further promoted to accelerate the energy mix transition.

Does the digital economy improve female employment? A cross-country panel data analysis

The digital economy has had an impact on the female employment rate over time. Currently, the researchers are more interested in investigating the impacts of the digital economy by focusing on its various aspects of female employment. The current study is motivated by this renewed interest to investigate the impact of the digital economy on female employment rates in Asian Developing Countries from 1990 to 2021. The digital economy is measured by several indicators such as fixed telephone subscriptions, fixed broadband subscriptions, mobile phone subscriptions, secure internet servers, and internet users. The Panel Autoregressive Distributed Lag (PARDL) model is used for analysis that reveals a positive relationship between female employment rates and the digital economy in both the short and long run. The control variables/factors, Education and GDP, also showed positive relationships with female employment. We suggest that governments prioritize funding for digital infrastructure and encourage fair access to technology, especially for women, based on our study. Furthermore, the positive effects of the digital economy on female employment can be strengthened through focused policy interventions, such as offering financial incentives to companies that hire and train women in digital skills. By utilizing these tactics, policymakers can guarantee that women are prepared to take advantage of the chances brought about by the quickly changing digital landscape, promoting gender equality and inclusive economic growth throughout Asian developing nations.

Bridging the digital divide: the impact of technological innovation on income inequality and human interactions

This study seeks to understand the nuanced relationship between technological innovation and income inequality with an emphasis on the broader implications of this interplay on human–technology interactions in diverse socioeconomic settings. Using cross-country panel data from 59 nations (31 developed and 28 developing) from 1995 to 2020, the study employed the common correlated effect mean group (CCEMG) estimator. The robustness of our findings was validated using the augmented mean group (AMG) estimator and the panel causality test. The results indicate that technological innovation, while heralded for its potential to bridge communication and operational gaps, inadvertently exacerbates income disparities, with a pronounced effect in developed economies. Moreover, interactions between technological innovation and variables such as economic growth, globalisation and export trade introduce additional complexities, including both buffering and acceleration effects on the primary relationship. These findings shed light on the double-edged nature of technological advancements, underscoring the need for informed policy-making that harnesses the benefits of innovation while mitigating its unintended socioeconomic consequences. The study sets the stage for domain-specific explorations such as in education, public health and business. It also invites interdisciplinary discourse on the ethical and behavioural dimensions of technology adoption, especially user experiences and societal outcomes.

Multicountry Time-Varying Taylor Rule: Modeling Unconventional Monetary Policies and Bond Premiums

In the post-financial-crisis era, advanced economies have increasingly adopted unconventional monetary policies such as zero interest rate policy, negative interest rate policy, forward guidance communication, and international coordination policies. Consequently, the traditional Taylor rule has lost some of its explanatory power. This analysis extends the Taylor rule from a single-country to a multicountry analysis using cross-country panel data, incorporating nonmacro factors and stationary correlation in the diffusion matrix for a dynamic factor analysis, specifically covering the Group of Seven countries with datasets compiled by Bloomberg L.P. for the period 1999–2022. This approach comprehensively models these unconventional monetary policies, demonstrating greater statistical validity than existing models. Notably, the model extracts the impact of zero interest rate policy and negative interest rate policy as nonmacro factors and presents the high correlation of residuals as indicative of international coordination among central banks. Additionally, by interpreting the discrepancy between the Taylor rule and actual rate as unintended interest rate fluctuations by central banks, the study posits that interest rates will eventually return to the central bank’s intended fair value. The model’s estimation errors could be treated akin to bond value factors in global risk premia.

Government, taxation and economic complexity

ABSTRACT This paper investigates the relationship between tax complexity, economic complexity, and government size. The findings are obtained through cross-country panel data and two-way fixed effects regressions, and reveal a nuanced connection: under small (large) government scales, increased tax complexity is associated with greater (smaller) economic sophistication. This suggests that tax complexity’s positive and negative aspects vary depending on the government conditions provided to the economy.

The parental role in intergenerational educational persistence: an empirical investigation with cross-country panel data

PurposeThe main aim of this study is to investigate the role of fathers and mothers in the intergenerational educational persistence for sons and daughters under two dimensions that characterize the clusters of countries: redistributive policy and governance.Design/methodology/approachData from the Global Database of Intergenerational Mobility (GDIM), hierarchical cluster analysis on principal components and panel regression are used in this study to estimate intergenerational educational correlation and to investigate its determinants related to the parents’ and descendants’ education variables in 93 countries grouped in four clusters. The empirical analysis is differentiated by gender combinations of parents and descendants.FindingsIn the clusters of countries characterized by high inequalities and poor governance, our findings show that the role of the fathers is stronger than that of the mothers in educational transmission; fathers and mothers are more influential for the daughters rather than for the sons; parental educational privilege is the main driver of intergenerational educational persistence; there is an inverse U-curve in the association between educational inequality of the parents and educational correlation for the sons. Differently, in the countries characterized by high income, low redistributive conflict and better governance, the role of the mothers is stronger and education mobility for the daughters is higher than that for the sons.Social implicationsThe authors’ results remark on the importance of social welfare policies aimed to expand a meritocratic public education system including schooling transfers for lower social class students and narrowing the gender gap in educational mobility between daughters and sons. Social welfare policies should also be oriented to spread high quality child care systems that help to foster greater women equality in the labor market, because the strength of educational persistence depends on the position of the mother in the economic hierarchy.Originality/valueThe distinctiveness of the paper can be found in the fact that this study investigates the parental role differentiating by gender and coupling hierarchical cluster analysis on principal components with panel regression models. This allows us to have a sample of 93 countries aggregated in four groups defined in two dimensions: redistributive policy and governance. Amongst the determinants of educational transmission, we consider not only education’s years of the parents but also other determinants, such as educational inequality and privilege of the parents. We also identify the effects of investment in human capital and educational inequalities for the descendants on education mobility.

The role of economic complexity in shaping the energy-growth nexus: Evidence from cross-country panel data

The study investigated the interplay between energy consumption (EN), economic growth (EG), and economic complexity across 59 countries from 2000 to 2018. Employing panel data methods, the research examined various models to estimate long-term effects while addressing unobserved heterogeneity and potential biases. Results indicate significant relationships between EG, EN, and economic complexity. Notably, the economic complexity index (ECI) displayed a positive effect on economic development, while trade openness and foreign direct investment showed varying impacts. The study identified a positive association between EG and EN, suggesting that increased energy consumption accompanies economic growth. However, a higher capital-to-labor ratio was associated with lower EN, indicating a substitution effect. Of particular note is the significant positive impact of the interaction between ECI and EN on GDP across various models. In the Country Fixed Effects Model, a one-unit increase in the interaction correlated with a 0.026 unit increase in GDP (p < 0.001). Similarly, significant positive relationships were observed in the Panel EGLS and FMOLS models, with coefficients of 0.055 and 0.031, respectively (p < 0.001 and p = 0.011). Conversely, all models consistently demonstrated a negative relationship between economic complexity and GDP, with coefficients ranging from -0.062 to -0.089 (p < 0.001). These findings underscore the importance of considering economic complexity and energy consumption in policy interventions aimed at promoting sustainable economic growth. Policymakers are encouraged to adopt comprehensive approaches that account for the complex interplay of various factors influencing economic development and energy consumption to formulate effective strategies.

Study of the Impact of Trade Conflicts on Technological Innovation

This thesis utilizes cross-country panel data from Global Trade Alert and WTO databases, and adopts principal component analysis and dynamic panel system GMM estimation to conduct empirical research on the impact of trade conflicts on technological innovation. The results of the study show that trade conflicts are conducive to the improvement of the efficiency of technological innovation in each country, and the specific mechanism is that trade conflicts cause enterprises to lose their inherent market advantages and form the elimination system of the last-stage enterprises within the market to force them to carry out technological upgrading. As China is in a critical transition period from high-speed development to high-quality development, this thesis provides policy advice on how to improve China's technological innovation capacity through the implementation of trade policy.

Exploring the impact of macro-determinant factors on energy resource depletion: Evidence from a worldwide cross-country panel data analysis

The depletion of energy resources stands out as one of humanity's major challenges. Therefore, understanding the determinant factors that could potentially affect the depletion rate of energy resources is emerging as one of the main research interests of academics in this field, and this study intends to contribute by filling this gap. This paper aims to investigate the influence of different factors that can be categorised into six main categories, such as education, governance quality, sustainability, technological advancements, economic development, and health expenditures, on the depletion of energy resources in a large sample of 132 countries clustered according to their income level, for a 14-year period (2007–2020). To this end, we propose six composite indices that we developed to capture each of the six categories of macroeconomic factors. Following the panel data analysis conducted for each cluster of countries, classified based on World Bank income classification, our findings suggest that the most determinant factors for the energy depletion rate are education (for upper-middle income), governance quality (for high-income), technology advancements (for low-income), economic development (for high, upper-middle, and low-income), and health expenditures and diseases (for high, lower-middle, and low-income countries).

Policy Evaluation in Polarized Polities: The Case of Randomized Controlled Trials

This paper provides a political-economic analysis of policy evaluation. We focus on Randomized Controlled Trials (RCTs) as a subset of policy evaluations and argue that they are used instrumentally by decision-makers in order to improve perceptions of reforms and help secure policy legacy. We theorize that this ’credibility premium’ is more valuable for incumbents in politically polarized societies, which we empirically examine using two methods. First, we provide a series of vignettes of prominent randomized evaluations embedded by governments in policy roll-outs and a detailed case study of the Liberian government’s decision to commission a third-party RCT evaluation of a proposed primary school privatization reform. Second, we have compiled a unique cross-country panel data set on RCTs in development policy since 1996, with which we demonstrate that RCTs are more likely to occur in polarized societies, and that the effect is amplified by the degree of political competition.

Impact of digital transformation on global services trade flows

Abstract Globalization paired with rapid technological advancements has transformed the landscape of the services trade, positioning digital transformation as a critical determinant of trade flows. This analysis delves into how digital transformation influences global services trade flows, establishing a model to examine the dynamics between exports and imports. Through empirical analysis using cross-country panel data, the study reveals a positive correlation between digitalization and the activities of exporting and importing services. Notably, the escalation in digitalization level markedly boosts exports in telecommunication, information technology, and other business sectors. Factoring in controls such as exchange rates and trade efficiency, the findings highlight digital transformation’s role in elevating the growth rate of global services trade exports by 5.82%, especially pronounced in telecommunication and information services sectors. The study advocates for enhanced investment in digital infrastructure and policy innovation to minimize trade barriers and optimize global services trade flows.

Does national leaders’ work experience matter for economic growth?

I examine the effects of national leaders’ work experience on economic growth. Exploiting a cross-country panel data set that covers 135 countries and 60 years (1950–2010), I find that leaders’ richness of experience in public sectors (REPS) has significant and positive impacts on economic growth. I employ random leadership transitions and a regression discontinuity approach based on close elections to establish causality. I also rule out the case that better growth trajectories lead to the selection of more experienced leaders. REPS also improves various economic and political outcomes. Leaders’ work experience in private sectors does not have discernible effects on economic growth.

An empiric on geopolitical risk and the tourism–economic growth nexus

Purpose This study empirically examines the moderating role of geopolitical risk on the tourism–economic growth nexus by applying a recent geopolitical risk indicator developed by Caldara and Iacoviello (2022) in a cross-country panel data growth model context for a sample of 24 countries.Design/methodology/approach A Dummy Variable Least Squares panel data model, nonparametric covariance matrix estimator and SYS-GMM estimation techniques are employed for the analysis. The authors capture the GPR moderating effect by disaggregating the cross-country sample according to low versus high country GPR score and through a GPR interaction coefficient. Several controls are included in the models such as gross fixed capital formation and—consistent with Barro (1990)—government consumption. Trade openness is used to account for the export-led growth effect. In line with neoclassical growth theory (e.g. Barro, 1991), the authors also include the real interest rate, to account for policy makers' commitment to macroeconomic stability, financial depth, as a proxy for financial development, population growth and the level of secondary school education. The authors also control for unobserved country-specific and time-invariant effects.Findings The research finds that the interaction term of geopolitical risk significantly contributes to the predictive ability of the regression and provides empirical evidence that confirms that only in low geopolitical risk countries international tourism positively and significantly contributes to economic growth. Important theoretical and policy implications flow from these findings.Originality/value The study not only contributes to advancing academic knowledge on the tourism–growth nexus, it also has impact beyond academia. Many countries have in the past pursued and many continue to pursue, tourism specialization and/or tourism-led growth strategies based on the theoretically well-established and empirically validated positive link between inbound tourism and economic growth. The findings alert policy makers in such countries to the significant moderating role that geopolitical risk plays in affecting the above-mentioned relationship and to the importance of prioritizing geopolitical stability as a policy precursor for the successful implementation of such strategies.