Fixed-effects Regression Models Research Articles

Can farmers' digital literacy improve income? Empirical evidence from China.

This paper explore the impacts and mechanisms of digital literacy of farm households on income. The baseline regression of the impact of digital literacy of farm households on household income uses a fixed effects regression model, and the 2SLS regression model is used to address the endogeneity problem present in the model. The findings reveal that improving digital literacy among rural households significantly increases their family income, a result that remains robust even after considering endogeneity issues. Further examination of the mechanisms shows that enhancing digital literacy among rural households significantly improves their information acquisition capabilities and cognitive skills. It also deepens financial services, boosting the usage and engagement of rural households in digital financial activities, thereby enhancing family income levels. Facilitating rural residents' access to digital skills and tools to ride the digital economic wave, ensuring fair access, and achieving sustainable family income are of paramount significance for rural revitalization. It is also a crucial step in bridging the digital divide and promoting shared prosperity.

The impact of credit ratings on international investment: Evidence from an emerging market

This study examines the influence of sovereign credit ratings on international investments in emerging markets, focusing on Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI). Using data from 22 emerging economies spanning 1999 to 2019, we employ OLS and fixed-effects regression models to analyze how credit ratings affect investment flows and market volatility. The findings indicate that sovereign credit ratings significantly impact investor decisions, as these ratings serve as a key metric in assessing investment risk and potential. This research highlights the essential role of credit ratings in enhancing financial stability and promoting economic integration through foreign investments, with implications for growth and trade. The study provides novel insights for investors, policymakers, and rating agencies on the role of credit ratings in emerging market investments, contributing to a deeper understanding of their impact on global economic dynamics.

A Longitudinal Examination of Autism Services, Child Adaptive Functioning, and Parent Quality of Life during the COVID-19 Pandemic.

The delivery of services to children with autism spectrum disorder (ASD) was disrupted during the coronavirus disease 2019 (COVID-19) pandemic, which may have affected child functioning and caregiver quality of life (QoL). This study examined changes in service intensity, child adaptive functioning, and caregiver QoL during the COVID-19 pandemic. Participants were 146 caregivers (87% mothers) of children with ASD (M age = 8.22 years; SD = 4.21) who were invited to complete an online survey about service intensity, child functioning, and caregiver QoL at four time points between the summer of 2020 and the summer of 2021. Simple regressions indicated that child adaptive functioning and caregiver QoL increased over time after stay-at-home orders were lifted. Fixed effects regression models indicated that increases in service intensity were associated with concurrent increases in caregiver physical QoL. Decreases in child repetitive behaviors were associated with concurrent increases in caregiver social and environmental QoL. These findings suggest that children and their caregivers demonstrated resilience in the year after stay-at-home orders were lifted. Additionally,service intensity and child repetitive behaviors may impact caregiver QoL, making these variables areas of opportunity for stakeholders and professionals.

Care Labor and Family Income Inequality: How Childcare Costs Exacerbate Inequality among U.S. Families

Care infrastructures are essential for supporting families and enabling women’s participation in the labor market, but they also have implications for family income inequality. This article examines access to childcare services in the United States as a case study. We propose that market-priced childcare systems generate inequalities in how births affect mothers’ contributions to family income, because they constrain post-birth labor supply for lower-income women more than for higher-income women, and aggravate family income inequality as a result. Using the Survey of Income and Program Participation (SIPP) merged with state-level childcare prices, we estimate individual fixed-effects regression models for the consequences of births on family income and its proximate determinants: mothers’ labor supply and earnings, and partners’ labor supply and earnings. We find that childcare prices increase post-birth earnings losses for mothers without college degrees, but not for mothers with college degrees, and these losses are not compensated for by increases in partners’ earnings or by income transfers. As a result, childcare costs exacerbate family income gaps between partnered women with and without a college degree by 34 percentage points.

Digital financial inclusion, e-commerce development and entrepreneurial activity

While digital transformation has revolutionized financial services and commerce globally, the complex interplay between digital financial inclusion (DFI), e-commerce development, and entrepreneurial activity remains understudied, particularly in emerging economies. Prior research has largely focused on isolated effects of either digital finance or e-commerce on economic outcomes, overlooking their potential synergistic impact on new business creation. This study investigates how DFI influences entrepreneurial activity through e-commerce development in China, using panel data from 275 prefecture-level cities (2011−2021). Employing fixed-effects regression models and instrumental variable approaches, we find that DFI significantly enhances entrepreneurial activity, with stronger effects in non-central and non-provincial capital cities. The impact varies regionally: DFI's influence is most pronounced in Eastern China, where it works synergistically with human capital and trade openness, while in Central and Western regions, its effectiveness depends more on GDP and infrastructure development. Our findings demonstrate that e-commerce partially mediates DFI's impact on entrepreneurship, suggesting that digital financial services catalyze new business creation both directly and by fostering e-commerce development. These results provide novel insights for policymakers seeking to leverage digital transformation for inclusive economic growth, highlighting the importance of tailoring digital financial initiatives to regional economic contexts.

Intelligent manufacturing and corporate green transformation

The rapid evolution of intelligent manufacturing technologies presents opportunities and challenges for corporate environmental sustainability. Although these advancements offer potentially improved efficiency and reduced environmental impact, their actual effect on firms' green transformation remains understudied, particularly in the Chinese market. Hence, this research fills this gap by focusing on the mediating roles of financing constraints and knowledge diversification. Utilizing a comprehensive dataset of 18,390 firm-year observations from Chinese A-share listed companies between 2007 and 2022, we employ fixed-effects regression models and mediation analyses to examine these relationships. Our findings reveal a notable positive impact of intelligent manufacturing on green transformation, partially mediated by reduced financing constraints and increased knowledge diversification. Furthermore, we uncover important heterogeneities across firm lifecycle stages and ownership structures, with mature firms and state-owned enterprises benefiting more from intelligent manufacturing in their green transformation efforts. These results contribute to the growing literature on sustainable Industry 4.0 and offer valuable insights for policymakers and corporate leaders seeking to leverage technological advancements for environmental sustainability.

Public Spending and Inclusive Growth in Developing Asia

This paper examines the impact of government spending on inclusive growth in developing Asia, focusing on fiscal redistribution through education, health, and social benefits. Using panel data from 16 countries over the period 1970–2017, we apply a fixed-effects logistic regression model to assess the likelihood of inclusive growth episodes. Our findings indicate that fiscal redistribution, particularly through targeted health and education spending, significantly enhances the chances of achieving inclusive growth. The results also suggest that redistributive spending helps reduce income inequality, ensuring that the benefits of economic growth are more widely shared. We further explore the practical implications of these findings through case studies of China, India, and Vietnam, demonstrating how effective government spending can foster inclusive growth. The paper highlights the importance of well-targeted fiscal policies to support sustainable and equitable development in the post-COVID recovery.

Analyzing the adoption of nutrition-sensitive carp-SIS polyculture technology: evidence from a case study in Bangladesh

IntroductionSmall indigenous species (SIS) of fish are rich in micronutrients that are essential to combat the existing malnutrition in Bangladesh. However, their availability is constantly decreasing due to gradual environmental degradation making their availability irregular and hence expensive in the market. Integrating SIS with carps in homestead ponds is being promoted as a form of nutrition-sensitive aquaculture to enhance both production and consumption of these nutrient-rich species. Various improved pond management techniques (IPMTs) are suggested to boost the nutrition-sensitive carp-SIS polyculture.ObjectivesThis study examines the trends and factors influencing the adoption of IPMTs using the sustainable livelihood framework (SLF) approach. We address the following three key questions: (i) What are the trends in production and consumption of fish, in particular SIS from homestead ponds? (ii) Have farm households adopted or disadopted IPMTs over time? (iii) What are the determinants of adoption and disadoption of IPMTs?MethodsBased on primary data of 234 households from Barishal district from 2014 and 2022, we perform significance tests to compare project and non-project households in 2014 versus 2022 and apply fixed effects Poisson regression and fixed effects negative binomial regression models to identify household decisions to adopt the IPMTs.Results and conclusionQuantitative survey results indicate a significant increase in the production and consumption of SIS over time. In 2014, the project households exhibited adoption rates of 60% or more for various IPMTs such as stocking of fast-growing species, pre-stocking liming, pond dike construction, fertilizer application, stocking of high quality fish seeds, aquatic weed control, and turbidity management. However, by 2022, some of these IPMTs were disadopted by project households and only a few techniques, including providing sunlight exposure to ponds, pre-stocking liming, and supplementary feeding, were more widely used. Additionally, many non-project households also increased their adoption rates of IPMTs significantly. The fixed effects regression model shows that adoption is positively influenced by the number of household members participating in aquaculture, size of the pond, sole ownership of the pond and the number of years household has been involved in aquaculture. Follow-up activities such as monitoring and training of the project beneficiaries and government support are recommended to support long-term adoption of the IPMTs.

Does Intellectual Capital Influence Firm's Financial Performance in Bangladesh?

This paper aimed to find the effects of intellectual capital and its components on firms’ financial performance in Bangladesh. A sample of 100 firms comprised of 48 manufacturing, 21 services, and 31 banking companies was studied for five years from 2017 to 2021, setting 500 firm-year observations. Data was collected purposively from secondary sources, such as annual reports of sampled companies. The robust fixed-effect regression model using STATA 14.2 software was applied to test the hypothesis due to autocorrelation and heteroscedasticity problems. The regression results documented that overall IC, human capital efficiency (HCE), and capital employed efficiency (CEE) positively and significantly enhanced the ROA and ROE of the firms. However, structural capital efficiency (SCE) and relational capital efficiency (RCE) negatively and insignificantly influenced the same. The study contributes to resource-based theory using econometric methods to extend the samples of both financial and non-financial companies. This study helps investors, managers, policy-makers, governments, and accounting regulatory bodies regarding the utilization pattern of invisible and tangible resources in Bangladeshi firms.

The motivating effect of positive social emotions on digital transformation of manufacturing enterprises–evidence from financial news and public opinion

ABSTRACT This paper investigates the impact of digital transformation on positive social emotions within manufacturing enterprises and examines the moderating effects of management tone and marketing capabilities on this relationship. This research uses a panel fixed-effect regression model to empirically examine the impact of positive social emotions on the digital transformation of manufacturing enterprises from 2016 to 2020 based on panel data of Chinese A-share listed companies in Shanghai and Shenzhen. The results indicate that social positive emotions significantly contribute to the digital transformation of manufacturing enterprises. The effect of social positive emotions on the digital transformation of manufacturing enterprises is strongly heterogeneous in terms of differences in enterprise attributes and geographical differences. Further analysis reveals that marketing capability and corporate executive tone, directly or indirectly, both have a considerable positive moderating effect on the aforementioned mechanism. In contrast, innovation capability has little moderating influence. In order to better regulate external positive social emotions to promote digital transformation, manufacturing enterprises need to emphasise management tone and enhance their marketing capabilities. These might facilitate companies in utilising additional social resources, strengthen internal strategic digital transformation decisions, and advance the development of digital transformation in China's manufacturing sector.

Windows of opportunity for unrelated diversification: a patent data analysis of the field of neurotechnology

PurposeThis study investigates the potential of low-income countries to mitigate technological lock-ins by exploiting windows of opportunity (WOOs). Given their inherent inclination toward path dependency, these countries often face challenges in diversifying beyond their established technological trajectories. We examine the pivotal role of adopting shorter cycle times of technologies (CTTs) in opening technological WOO, triggering unrelated diversification and accelerating technological catch-up.Design/methodology/approachUsing fixed-effect regression models, we analyze country-level patent data within the neurotechnology domain from 1995 to 2021 – a period marked by significant technological change since 2010. Our focus lies in comparing diversification and catch-up trends between low-income and high-income countries, while evaluating the performance of CTT.FindingsOur findings reveal that as low-income countries increase their knowledge complexity (KC), they tend to be locked into existing technological paths. To mitigate lock-in risks, they can strategically adopt technologies with shorter CTTs. These technologies act as catalysts, opening up technological WOOs and stimulating unrelated diversification. KC presents a double-edged sword in the catch-up process, but unrelated diversification can eliminate this dilemma.Practical implicationsOur study introduces the KC-CTT framework, proposing practical strategies to enhance and sustain countries’ competitive advantages.Originality/valueDiversification and catch-up emerge from two separate bodies of literature but present a conceptual overlap. This research bridges the gap between the two literatures by investigating the impact of CTT as their predictor variable.

The Impact of Insurance-Specific Risk on Firm Performance of Listed Insurance Companies in Sri Lanka

Insurance-specific risk includes challenges and uncertainties specific to the operations and functioning of insurance companies. The study therefore investigates the effect of these insurance-specific risks on the profitability of listed insurance companies in Sri Lanka over 11 years (2012-2022) with a sample size of 27 firms. Three variables, such as reinsurance, technical provisions, and underwriting risks, have been used to measure insurance-specific risk as independent variables. The Return on Equity (ROE) and Re-turn on Assets (ROA) were used to measure firm performance as the dependent variable. The study is based on the Ex-Post Facto Research Design, which uses data already collected. The study used secondary data from their annual reports. The results of the fixed effect regression model showed that the technical provision risk and reinsurance risks had a negative and significant impact on ROE, while the underwriting risk had a negative and insignificant impact on ROE. The study concludes that the best model for the evaluation of Insurance firm performance is ROE rather than ROA. Due to the arguments, ROE and ROA are both considered performance indicators where ROA is not significant with variables. The study recommends that insurance companies in Sri Lanka should make sufficient provision for outstanding claims by conducting an adequate assessment of their liabilities and also taking into account experience to develop a comprehensive procedure for effectively monitoring and controlling their outstanding claims. Further, listed insurance companies in Sri Lanka will consider their reinsurance policies and risk retention ratios and listed insurance companies need to enhance their ability to cover most incurred claims by themselves.

The Sustainable Growth of Korean Listed Firms in the lens of Pay Disparity and Managerial Overconfidence

This study aims to assess the impact of pay disparity on the sustainable growth of listed firms in Korea, and to explore how this relationship is influenced by the presence of managerial overconfidence. Employing a fixed-effects regression model, the analysis draws on 10,244 firm-year observations from Korean-listed firms between 2012 and 2022. The findings reveal a significant positive association between pay disparity and the sustainable growth of firms, supporting the tournament theory, Moreover, this effect is more pronounced in companies led by overconfident management. The robustness tests also confirm the main regression results. This study highlights how pay disparity together with the presence of managerial overconfidence can drive sustainable growth. It recommends tailored compensation strategies that consider management dynamics and organizational context, helping firms navigate compensation challenges and enhance long-term success and competitive advantage. The study provides valuable insights for policymakers, investors, and other stakeholders in crafting equitable compensation practices that promote resilient and sustainable business environments. This study’s originality lies in its consideration of managerial overconfidence, setting it apart from prior research that primarily examines the direct link between pay disparity and sustainable growth.

Nexus between board characteristics and financial performance: Evidence from developing economy

Corporate performance is the key indicator of availing the economic performances in all economies. Especially for the emerging economy, it is the oxygen for smooth economic operations. The study aims to investigate the influence of board characteristics on the corporate performance of the listed pharmaceuticals and chemicals sector from a developing country, namely Bangladesh. This empirical study examines eight attributes of the board and four financial performance indicators of the businesses. Here, the annual reports of the DSE-listed pharmaceutical and chemicals companies are considered to examine the impact of board attributes on corporate performance. Based on panel data analysis, this empirical study concludes that the fixed effect regression model is suitable for all four models. Except board size, the results demonstrate that all board attributes are generally statistically significant. Furthermore, it confirms that all the significant characteristics of the board are positively associated with corporate performance, except for board independence. The research offers valuable insights for policymakers, investors, organizations, and scholars, promoting optimal board structures, innovative solutions, and an enhanced understanding of corporate governance matters. This research explores the challenges in board attributes, which enhances our understanding of corporate governance matters and their impact over the last decade in the listed pharmaceutical and chemicals sectors in Bangladesh.

The Impact of Cryptocurrency Exposure on Corporate Tax Avoidance Among US Listed Companies

This study examined the association between corporate cryptocurrency activities and tax avoidance outcomes, utilizing data from US public firms covering the period from 2015 to 2023. Financial data were sourced from Compustat, while details regarding cryptocurrency activities were manually extracted from 10-K and 10-Q filings. Our analysis employed a fixed-effects regression model to examine the impact of these activities on cash effective tax rates (ETR). The findings indicate that firms engaged in cryptocurrency activities tend to have a lower ETR compared with those without such involvement. Notably, this effect was predominantly observed in companies directly engaged in cryptocurrency activities, such as accepting cryptocurrency as a payment method or actively trading cryptocurrency on an exchange platform. In contrast, firms involved in crypto mining or initial coin offerings did not exhibit a similar association. Our findings offer significant regulatory insights for governance bodies concerned with the implications of corporate cryptocurrency activities on tax strategies.

Board diversity and firm performance in Chinese manufacturing firms: Moderating role of CEO duality

This study explores the relationship between board diversity and firm performance, with a focus on the moderating role of CEO duality in Chinese manufacturing firms. This study applies panel fixed-effect regression models for the period 2008–2022, and findings show that board diversity is positively associated with firm performance, and CEO duality negatively moderates the relationship. However, the findings also show that a highly diversified board can minimize the negative effect of CEO duality and increase the firm’s performance. Furthermore, the findings broaden the understanding of board attributes, showing that the education index is more evident among other board attributes for firm performance. This study verifies its results using the two-step system generalized method of moments approach and different board attributes in robust tests. The findings suggest that strategic efforts to promote board diversity may increase the board’s monitoring function and control managerial opportunism, ultimately improving firm performance in the Chinese business landscape. JEL CLASSIFICATIONS: G30; G34; L25

Creditor rights and investment sensitivity: evidence from an emerging market

PurposeCreditor rights reduce or increase agency problems in corporations, affecting financial decisions. This study examines the impact of India’s Insolvency and Bankruptcy Code of 2016 (hereinafter referred to as the Code) on firms’ investment and investment sensitivity based on their health, considering this Code as more creditor-friendly than pre-existing bankruptcy laws.Design/methodology/approachThis study uses a quasi-natural experiment that employs the difference-in-differences (DID) and propensity score matching difference-in-differences (PSM DiD) approach by considering the Code as treatment and categorizing the firms into distressed (treated group) and healthy (control group) firms. For the purpose of analysis, a fixed-effect regression model is used.FindingsThis study finds that distressed firms reduce their investment after the Code, but healthy firms do not observe any change. It shows that the reduction in investment of the distressed group is significantly greater than that of the healthy group due to agency conflict and the liquidation bias hypothesis. However, the reduction in investment is not followed by the change in investment sensitivity.Originality/valueThis study adds to the existing studies on the impact of the Insolvency and Bankruptcy Code, 2016 on investment. No study explores the relationship between this Code and investment based on the financial health of the firms. Also, none of the studies explores the impact of the Code on investment sensitivity. The results show that this Code has provided stronger protection to the creditors, which hurts the internal stakeholders’ interests. The study has implications for policymakers and academicians.

How Does Digital Economy Influence Green Mobility for Sustainable Development? Moderating Effect of Policy Instruments

The role of green mobility as a low-carbon lifestyle in carbon reduction and sustainable development cannot be ignored. The digital economy effectively promotes green mobility for sustainable energy use in the broader setting of the significant data era and sustainable development. This study utilizes the panel data of 264 cities in China from 2011 to 2021 to construct a two-way fixed-effects regression model to analyze the impact of the digital economy on residents’ green mobility and the indirect impact mechanism of the two policy tools, a low-carbon transportation pilot and carbon emissions trading, from theoretical and empirical aspects. The results show that digital economic development helps promote residents’ green mobility. In addition, the implementation of low-carbon transportation pilots and carbon trading policies has strengthened the role of the digital economy in promoting green mobility. The findings remain after introducing robustness tests such as “smart city” pilots as exogenous shock policies. A heterogeneity study suggests that the effect of the digital economy on green mobility for residents is more significant in economically developed and human capital-rich areas. This study contributes to the literature by providing empirical evidence on the role of the digital economy in promoting sustainable urban transportation and by demonstrating the moderating effects of policy instruments, thereby offering practical insights for policymakers aiming to reduce urban pollution and enhance sustainable development.

Debt maturity and climate change exposure: does life cycle moderate?

PurposeIn this study, I explore how climate exposure influences debt maturity and whether the life cycle moderates this relationship.Design/methodology/approachThis study employs robust panel fixed-effects regression models on 32,249 firm-year observations over 2002–2022. The meticulous examination of the relationship between climate exposure and debt maturity and the use of IV regression models to address endogeneity ensure the validity and reliability of the findings. Exploiting an external shock to validate the results further enhances the robustness of the analysis.FindingsThe study reveals that climate change exposure significantly negatively affects debt maturity, a finding that holds for both climate-related opportunities and regulatory risks. While the life cycle impacts debt maturity, it exacerbates the negative effect for firms in the introductory and growth phases. This exacerbation is due to underinvestment problems and a lack of financial flexibility. These findings shed new light on the relationship between climate exposure and debt maturity, providing valuable insights for corporate finance professionals and strategic managers.Practical implicationsThe evidence presented in this study has strategic implications for corporate managers, investors, academia and other stakeholders. The insights on the choice or substitution of debt maturity during certain life cycle phases can provide valuable guidance to management, empowering them to make informed decisions.Originality/valueThe dynamic role of the corporate life cycle in the relationship between capital structure and climate exposure is a novel area of research. This paper significantly contributes to our understanding of the combined relationship of firm life cycle and climate exposure on debt maturity, offering a fresh perspective on an underexplored topic. This study’s unique approach and original findings will pique the interest of academic researchers and corporate finance professionals alike.

Who is fatigued? A repeated cross-sectional survey of officer attitudes towards people who use opioids, naloxone, and their role in responding to opioid overdoses

Many police departments have equipped their officers with naloxone as a promising response to the opioid crisis. Though research suggests police can effectively administer naloxone, recent studies suggest that officers may develop negative attitudes over time as they continually respond to overdoses. This has been described as a “compassion fatigue” effect. We investigate the compassion fatigue hypothesis with a repeated cross-sectional survey of officers in the Tempe, Arizona Police Department. We focus on three outcomes (1) perceptions of officers' role in responding to overdoses, (2) perceptions of naloxone related risk-compensation beliefs, and (3) stigmatizing perceptions of people who use opioids (PWUOs). We run one-way fixed effects regression models to assess if officer attitudes have changed over the study period. Then we run multivariate regression models to test whether officers' opioid overdose response frequency is associated with any of the three outcomes. The findings suggest officers have become more supportive of responding to overdoses but have developed more stigmatizing views of PWUOs over time. This warrants further research attention. However, opioid overdose response frequency was not associated with any of the outcomes. We conclude with a discussion of these findings and their implications for police involvement in the opioid overdose crisis.