Fixed-effects Regression Research Articles

Board gender diversity and employee productivity. The moderating role of female leaders

Drawing on the Motivational Role Modeling Theory and Critical Mass Theory, the main objectives of this paper are to analyze the impact of Board Gender Diversity (BGD) on Employee Productivity (EP) and to investigate the moderating role of a Female CEO or a Female Board Chair on this relationship in Social Economy companies. The methodology used is a fixed-effects regression with panel data for 1,914 Spanish Social economy companies in the agri-food sector from 2017 to 2021. Our findings uncover a non-linear relationship between BGD and EP displaying a descendent curvilinear pattern, though not strictly U-shaped. Moreover, we confirm the moderating influence of a Female Chair, noting that its presence shifts the relationship between BGD and EP from an inverted curvilinear pattern to a U-shaped one. In this context, the board requires a minimum presence of women, set at a critical mass of 13 %. However, the moderating impact of a Female CEO remains inconclusive. This research underscores the significance of investigating board diversity, specifically emphasizing female leadership in understanding the link between BGD and EP. Moreover, to the best of our knowledge, this study is the first to explore the impact of BGD on EP by developing an integrated model based on Motivational Role Modeling Theory and Critical Mass Theory, and calculating the critical mass when a Female Chair is present on the board.

Are automakers overcharging consumers for electric vehicle batteries?

Given the recent slowdown in EV adoption rates in many countries despite decreasing battery prices, a better understanding the relationship between battery and EV prices is critical for industry and policymakers. We fill this gap in the literature by assessing to what extent ongoing increases in EV battery capacities have increased EV prices, and how this compares with actual EV battery prices. Specifically, we use fixed effects regression analysis to investigate the responsiveness of EV list prices to changes in battery capacity over time, finding evidence that increases in battery capacity led to increases in EV prices that are substantially greater than estimated EV battery costs over our sample. This suggests that automakers may be overcharging consumers for EV batteries and that recent decreases in battery prices are not fully benefiting consumers. This, in turn, suggests that EV prices have been higher than they otherwise could have been, which may have led to slower EV adoption in recent years.

The Impact of Environmental, Social, and Governance Disclosure Quality on Stock Price Volatility in Heavily Polluted Industries - Based on Chinese Listed Companies

Facing natural disasters caused by the destruction of ecosystems, the world is paying increasing attention to the protection of ecosystems. Meanwhile, investors are particularly concerned about enterprises' environmental, social, and governance (ESG) performance, which is considered to be crucial to long-term development and value improvement. Currently, access to ESG information relies mainly on proactive disclosure by companies. Although China attaches great importance to corporate ESG disclosure, the quality of many companies' ESG disclosures remains poor, especially in heavily polluted industries. As China’s financial market matures, more and more investors may utilize stock price volatility to assess investment risk and then make investment decisions. Therefore, this paper aims to examine the impact of ESG disclosure quality on stock price volatility in heavily polluted industries. Taking listed companies in China's heavily polluted industries as the research object, this paper explores the impact of ESG disclosure quality on stock price volatility in heavily polluted industries by building a two-way fixed-effects regression model. This paper chooses Bloomberg Data Terminal's scores on ESG disclosure quality of companies and takes 2012 to 2020 as the research interval. Ultimately, this paper launches the study based on 693 data from 77 sample companies. After regression analysis and robustness test, the following conclusion is drawn: ESG disclosure quality and stock price volatility of heavily polluted companies show a positive correlation.

Impact of Droughts on Served Drinking Water Disparities in California, 2007-2020.

Objectives. To quantify the impact of droughts on drinking water arsenic and nitrate levels provided by community water systems (CWSs) in California and to assess whether this effect varies across sociodemographic subgroups. Methods. I integrated CWS characteristics, drought records, sociodemographic data, and regulatory drinking water samples (n = 83 317) from 2378 water systems serving 34.8 million residents from 2007 to 2020. I analyzed differential drought effects using fixed-effect regression analyses that cumulatively accounted for CWS-level trends, income, and agricultural measures. Results. CWSs serving majority Latino/a communities show persistently higher and more variable drinking water nitrate levels. Drought increased nitrate concentrations in majority Latino/a communities, with the effect doubling for CWSs with more than 75% Latino/a populations served. Arsenic concentrations in surface sources also increased during drought for all groups. Differential effects are driven by very small (< 500) and privately owned systems. Conclusions. Impending droughts driven by climate change may further increase drinking water disparities and arsenic threats. This underscores the critical need to address existing inequities in climate resilience planning and grant making. (Am J Public Health. 2024;114(9):935-945. https://doi.org/10.2105/AJPH.2024.307758).

Driving human development through ecological impact for emerging economies: the role of trade openness.

The present study attempts to examine the link between trade openness and sustainable human development (SHD) in 19 emerging economies. The study used the data for the period from 1996 to 2019. The study employed fixed-effect regression with Driscoll-Kraay standard error techniques robust to cross-section dependence. The study found the favorable impact of trade openness on sustainable development through sustainable human development. Trade openness affects sustainable human growth in many ways. It is a critical component that should not be ignored in sustainable development policies. Moreover, foreign direct investment, economic growth, and renewable energy consumption positively impact the sustainable human development. In contrast, innovations and institutional quality have an adverse impact on SHD. The study also provides policy suggestions for the emerging economies that will promote all the dimensions of sustainable development: economic, social, and environmental.

IMF Conditionality and Government Education Spending: The Case of 10 MENA Countries

This study explores the impact of International Monetary Fund (IMF)-linked conditionality on government education expenditures in the Middle East and North Africa (MENA) region. Understanding the impact of conditional lending by international financial institutions on education spending is important due to the pivotal role education plays in fostering social and economic development. We use country-level panel data encompassing a representative set of 10 MENA countries from 1990 to 2020 and employ a cross-national fixed effects regression model. Our findings suggest that IMF conditionality demonstrates a positive relationship with government education expenditures in the MENA region. The proposed explanation is that the application of IMF policy advice can have a catalytic effect on donor financing, including for education. This indicates that the Fund’s financing arrangements in the region can free up fiscal space for social spending, which, in turn, signals a sort of departure of the IMF from the reputation that typically precedes it—its traditional bias for macroeconomic stability irrespective of social costs. We argue that our findings are instructive for policy, especially if one shares the idea that education is a necessary prerequisite for achieving Sustainable Development Goal (SDG) 4: guaranteeing inclusive and equitable quality education and promoting enduring learning opportunities for all.

Digital age imperatives and firm internal control quality: evidence from CEOs personal trait and type of state-owned enterprises

PurposeIn the context of an evolving digital-based global economy, this study aims to investige the impact of digital transformation (DT) on a firm’s internal control (IC) quality. It also explores how the personal traits of (CEOs) – such as age, gender and educational background – intersect with DT to shape the IC quality in various types of state-owned enterprises (SOEs).Design/methodology/approachThe study uses the data from China A-shares non-financial enterprises, listed on Shanghai and Shenzhen stock exchanges between 2007 and 2020. Using the fixed effect regression method alongside various statistical techniques, such as propensity score matching, alternative analysis and instrumental variables analysis, yields robust findings. These methods effectively address issues related to functional form misspecification and potential biases from omitted explanatory variables.FindingsThe findings reveal a positive impact of DT on firm IC quality, and this impact is more pronounced in firms when the CEO is female, young and possesses a higher level of education. Notably, the study also distinguishes between central and local state-owned enterprises (SOEs), highlighting that DT has a greater influence on IC quality in central SOEs, where CEOs often have higher political ranks and closer to government monitoring. Overall, the findings are robust and consist to alternative variable and other statistical methods.Research limitations/implicationsFollowing are the significant implications for both academia and business. First, firms that effectively adopt DT to enhance IC not only gain a strategic advantage over competitors but also establish efficient risk management practices and a robust IC system. Second, better IC resulting from DT can enhance investor and stakeholder confidence. This is particularly important for publicly traded companies, where investors and analysts closely scrutinize the robustness of IC systems. Third, DT could result in cost savings over time, as automation and streamlined processes may reduce the need for manual efforts and resource-intensive tasks associated with IC.Originality/valueThe findings are contributed to the literature in multiple ways. It enhances our comprehension of the intricate DT-IC quality relationship, and provides valuable insights into the transformative impact of DT on organizational operations and risk management. It also introduces a novel perspective by investigating how CEOs personal traits intersect with DT to shape IC quality, contributing to upper echelons theory. Furthermore, it expands the discussions on firm ownership by considering the types of SOEs (central vs. local), in the DT-IC quality context.

The Effect of ESG Performance on the Systematic Risk of Listed Companies in China: A Comparative Analysis of High-Tech Manufacturing Versus Conventional Industries

The continued growth of the ESG (environment, society, and governance) investing trend has garnered great interest from both academics and professionals alike in the past decade. Nowadays, even developing countries like China are seeing a new wave of ESG investment opportunities. However, the research on ESG investing in emerging markets remains relatively lackluster, and fewer ESG studies concentrate on the topic of systematic risk. Therefore, this study wants to provide an analysis of the effect of ESG rating on the systematic risk of listed companies on the A-share stock market in China through the lens of a comparative study between high-tech manufacturing and conventional industries. Based on the fixed-effect model regression result on the quarterly data of 240 companies from 2018 to 2021, this paper discovers a negative correlation between ESG rating and the systematic risk a company is exposed to and a greater effect of ESG performance on systematic risk in high-tech manufacturing industries than conventional industries. Overall, this paper not only presents a new perspective on the correlation between ESG investing and the systematic risk a firm is exposed to but also serves as an inter-industry research that tackles a phenomenon specific to the Chinese capital market.

Do people's health, financial and social resources contribute to subjective wellbeing differently at the age of fifty than later in life?

Population aging calls for a thorough understanding of how age impacts subjective wellbeing. Resource theories posit that people need resources, such as health and social relations, to produce subjective wellbeing. Since losing resources is more likely at older age, we examined whether the availability of resources indeed changes with age, and how this affects subjective wellbeing.We analysed data from 75,895 individuals aged 50 and older participating in two or more waves of the Survey of Health, Ageing, and Retirement in Europe. We analysed, separately for women and men, fixed effect regression models, estimating main and interaction effects of age and indicators of health, financial and social resources on two indicators of subjective wellbeing, i.e., life satisfaction and quality of life.We found that the contribution of health to subjective wellbeing does not diminish in later life, and is not different for women and men. Also, having some close others is important for both women and men to maintain subjective wellbeing at every age. However, having a wider social network contributes more to the subjective wellbeing of women than of men at older age. Furthermore, having limited financial means and being widowed might get a bit easier to endure with advanced age, though there is no threshold of age after which any of these resources becomes irrelevant.Health and social policies are needed to strengthen older people's resources, to help maintain subjective wellbeing up to very old age. Gender differences should be taken into account when developing these policies.

Related party transactions and tax avoidance: does government ownership play a role?

Purpose This study aims to examine the association between related-party transactions (RPT) and tax avoidance. The study further investigates whether government ownership improves scrutiny of tax aggressiveness activities among Taiwanese group companies. Design/methodology/approach The authors used 16,061 firm-year observations derived from the Taiwan Economic Journal Database (TEJ) from 2005 to 2021. The authors applied GLS fixed-effect regression. Additional tests, such as a difference-in-difference examination, propensity score matching (PSM) analysis and other tests were performed to obtain more robust results. Findings The results show different consequences between eliminated and non-eliminated RPT toward tax avoidance. RPT enhances tax benefits aligned with the efficient contracting hypothesis. Under varying degrees of government control, this paper empirically reveals that government ownership has a role in mitigating tax avoidance. This implies that government control improves corporate governance by balancing opportunistic and efficiency-based tax avoidance. Practical implications This paper provides substantial practical implications since using the strategy of reducing taxes through RPT will result in greater tax savings at the business group level. Therefore, RPT is beneficial for enhancing business efficiency. Furthermore, government control increases corporate governance quality, which could lead to balancing tax aggressiveness activity. Originality/value Using a unique setting for RPT reporting in Taiwan, this paper divides RPT into eliminated and non-eliminated RPT. The findings offer significant insight for policymakers, investors and managers regarding the utilization of RPT to enhance efficiency in business groups. Additionally, this paper highlights the role of government control in preserving a harmonious balance in tax planning practices.

Firm-level political risk and corporate investments in the hospitality and tourism industry: The moderating role of asset tangibility and corporate governance quality

Firms in the hospitality and tourism (HT) industry need to continuously make capital investments to sustain their long-term growth. These investments occur under varying conditions, including levels of political risk. Hence, this study examines the effects of firm-level political risk on corporate investments of 251 U.S. HT over the period 2002–2022. It further explores the moderating role of asset tangibility and corporate governance. Using fixed-effect regression analyses, the study finds that firm-level political risk negatively impacts corporate investments in the HT industry. Results reveal that asset tangibility and ownership concentration help mitigate the negative effect of firm-level political risk, while institutional ownership exacerbates this negative effect. Given that corporate investments are the backbone of the sustainable growth of HT firms, this research provides important implications for policymakers and practitioners in their attempts to reduce the negative effect of political risk on corporate investments.

Environmental, social and governance (ESG) performance as a moderator in assessing the impact of government subsidies on underinvestment in China

In recent years, underinvestment has become common among subsidised enterprises in China. Stakeholder theory asserts that environmental, social and governance (ESG) performance forces enterprises to prioritise stakeholder needs by incorporating ESG principles into business operations, which in turn influences business investment decision-making. This study examines the impact of government subsidies on firm underinvestment and whether ESG performance plays a moderating role in this direct relationship. A dataset of 17,780 firm-year observations of A-share public firms in China for the period 2011–2021 was employed, and the data were analysed using the ordinary least squares regression model, fixed-effects regression model, propensity score matching difference-in-difference model, and instrumental variable approach. These results indicate that government subsidies mitigate firm underinvestment and tend to reduce underinvestment in firms with higher ESG performance. Moreover, the findings indicate that the performance in ESG factors influences the effect of government subsidies on the lack of investment in state-owned enterprises (SOEs), as opposed to non-SOEs. This effect is more noticeable in heavily polluting industries compared to non-heavily polluting industries. These findings imply that the government should promote the ESG performance of subsidised firms to enhance their overall corporate investment efficiency.

Changing Attitudes? Investigating the Link between Couples’ Pandemic Behavior, Cognitive Dissonance, and Gender Role Attitudes in Germany

Abstract Research found that not only macro-level processes like cohort replacements foster gender role attitude (GRA) change, but also life events and changes in lived realities. Framing the COVID-19 pandemic as a ‘natural experiment’ allows to reduce endogeneity when examining the association between emerging cognitive dissonance and GRA change. Estimating asymmetrical fixed effects regressions, I investigate the influence of changes in the division of family labor on GRAs for respondents with no pre-pandemic attitude-behavior discrepancy, using pairfam waves 11 and 13. Indeed, changes in behavior for respondents who had aligned behaviors and attitudes before the pandemic can be associated with GRA adaptation: A change toward an egalitarian division of family labor during the pandemic can be associated with more egalitarian GRAs. Likewise, a change toward an inegalitarian division can be associated with less egalitarian GRAs. These findings support the usefulness of cognitive dissonance as one explanatory mechanism for intra-individual attitudinal change.

Institutional distance and subsidiary performance of multilatinas: moderating effects of ownership strategy and government support

Purpose: In this article we investigated the effects of regulatory and normative institutional distances on Emerging Market Multinational Enterprises (EMNEs) subsidiaries performance, and the moderating roles of the ownership strategy and the government support. Design/methodology/approach: We applied fixed-effects regression models for panel data to analyze a sample of 296 subsidiaries of 32 Brazilian EMNEs, from 2006 to 2015. Findings: We found that institutional distance positively affects subsidiary performance. Although, full ownership, and government support positively affects subsidiary performance, subsidiaries with partial ownership located in more developed and institutionally distant host countries presents superior performance. We also found a positive relationship between government support, regulatory distance, and subsidiary performance. However, the same relationship with normative distance was not statistically relevant. Originality/value: By analyzing different ways in which the institutional context affects subsidiary performance and different approaches to increasing or mitigating those effects, this study contributes to furthering the understanding of how institutional issues affect EMNEs, and the role of the home country government. Conclusions: The findings of this study could help policymakers make informed decisions about investments in EMNEs. This is achieved by analyzing the impact of government financial aid on the performance of subsidiaries.

The impact of ESG on corporate financial performance: Based on fixed effects regression model

The impact of ESG on corporate financial performance: Based on fixed effects regression model

Substitutive effects of accounting transparency and corporate governance on firm value

Recently, there has been increasing emphasis on the importance of accounting transparency and corporate governance. While previous studies have individually examined their impact on firm values, this paper investigates their combined effects. Using data from the Compustat and Center for Research in Security Prices databases obtained through Wharton Research Data Services, we measure accounting transparency and company value, and we employ the E-index as a measure of corporate governance. This study conducts firm, year, and industry fixed effects regressions on a large panel dataset comprising 21,476 firm-year observations. According to our research, both accounting transparency and good corporate governance have negative effects on the value of a company. This means that spending money to improve both may end up costing more than it benefits, which could lower the value of the company. These results support the notion that investors may see that maintaining high levels of accounting transparency and corporate governance can be excessively costly, while an overemphasis on these two metrics could potentially limit the flexibility and creativity of management. These findings have implications for managers tasked with achieving a balance between robust corporate governance, enhanced accounting transparency, and corporate value considerations.

The “Clinching” Effect and Affective Polarization: Exposure to Incivility via Social Media in the Presence of Online News

Abstract The contemporary media environment is often characterized as awash in uncivil and divisive messages. Central to this characterization, are social media, where partisans may engage in uncivil exchanges with outgroup members. The Internet has also become a key source of partisan news content, which is often filled with vitriol and “outrage” toward “the other side.” Using panel survey data from a large and diverse general-population sample of the US, the current study considers the influence of exposure to incivility on social media and online news use on a particularly emotional form of division, affective polarization. Fixed effects regression analyses find no main effects, but significant interaction effects between exposure to incivility via social media and online news use (pro-attitudinal, counter-attitudinal, and nonpartisan online news use) on affective polarization. Exposure to incivility via social media as a form of personal contact, appears to supplement the effect of partisan online news (and vice versa), whether pro-attitudinal or counter-attitudinal, intensifying affective polarization. However, when combined with exposure to incivility on social media, nonpartisan news appears to have an attenuating effect on affective polarization.

Does Sustainability Assurance enhance the connection between Corporate Governance and Firm Performance in India?

Scholarly attention to the association between corporate governance and firm performance, considering sustainability assurance as a moderator is scarce. This study aims to examine the moderating role of sustainability assurance in the nexus between corporate governance and firm performance in India. The data relating to 35 environmentally sensitive companies among the top 100 National Stock Exchange (NSE) listed entities were gathered from the ProwessIQ Database and annual reports of companies during 2016–2022. The fixed effect regression model was employed. The results show an insignificant effect of board effectiveness on firm performance as measured by return on assets (ROA), return on equity (ROE), and Tobin’s Q. Similar findings were documented on the audit committee effectiveness and firm performance nexus, except for Tobin’s Q (β = 0.316). In addition, the study did not support the moderating role of sustainability assurance on the board effectiveness and firm performance nexus, indicating the presence of ineffective corporate governance mechanisms. However, the results show that sustainability assurance significantly and negatively moderates the relationship between audit committee effectiveness and ROA (β = –0.021), ROE (β = –0.074), and Tobin’s Q (β = –0.996). This implies that the practice of external assurance of sustainability reports by firms with audit committee effectiveness is an additional burden due to the extra cost involved. Further, the result indicates the learning curve effect among Indian companies. Thus, the findings suggest the need for regulatory focus on encouraging sustainable business practices in terms of effective corporate governance and sustainability assurance. AcknowledgmentThe authors are grateful to Manipal Academy of Higher Education (MAHE), Manipal, for providing financial assistance in the form of a “JRF Contingency Grant” for this research article.

Towards environmental impact of inward foreign direct investment: the moderating role of varieties of democracy

PurposeThis paper aims to clarify the relationship between foreign direct investment (FDI), democracy and carbon intensity. This study examines the influence of types of democracy on the relationship between inward FDI and carbon intensity. For this purpose, it uses five varieties of democracy, including a composite democracy indicator as moderating variables.Design/methodology/approachThis study applies the fixed-effects panel quantile regression approach that considers unobserved heterogeneity and distributional heterogeneity using panel data from 160 countries during 1990–2020. By taking into account sudden changes in the volume of inward FDI, an event study is conducted across various sub-samples of democracy to check the robustness of the results.FindingsThe results show that FDI has a significantly negative impact on carbon intensity of the host country in the upper quantiles. In general, different types of democracy have a significant positive impact on carbon intensity across different quantiles. After considering the other factors, including industry intensity, trade openness, green technology, fossil fuel dependency and International Environmental Agreements, there is evidence that all types of democracy moderate the relationship between FDI and carbon intensity, thereby supporting the halo effect hypothesis. In addition, the interaction effects have a significant negative impact on carbon intensity of low- and high-carbon-intensive countries.Originality/valueThis paper offers several contributions to the literature on the effect of FDI and democracy on carbon intensity. This study overcomes the limitations related to the conceptualization and measurement of democracy found in the literature. While prior research has predominately concentrated on how democracy promotes the selection of FDI host-country locations, this study seeks to answer the question of whether democracy type has any effect on inward FDI, thus contributing to improving carbon intensity. Furthermore, this paper analyses the interaction effect on carbon intensity in different countries with different carbon intensity levels separately.

Spatio-temporal Heterogeneity of Factors Influencing Transportation Carbon Emissions in Provinces Along the Belt and Road

The administrative units of 17 provinces （autonomous regions and municipalities directly under the Central Government） along the "Belt and Road" were selected as basic spatial units to calculate the provincial traffic carbon emissions along the "Belt and Road" from 2000 to 2021. On the basis of analyzing the spatial and temporal characteristics of traffic carbon emissions by using the spatial autocorrelation method, the spatial and temporal heterogeneity of influencing factors of traffic carbon emissions was explored by combining a fixed-effect regression model and geographic detector. The results show that： ① The provincial traffic carbon emissions along the "Belt and Road" had significant spatial positive correlation, and the overall trend was upward. Additionally, the cluster evolution of high and low values of traffic carbon emissions presented the characteristics of polarization in space. The high value cluster area was mainly distributed in the open leading area, and the low value cluster area was mainly distributed in the core area of the silk road. ② Opening-up level and vehicle ownership were the positive driving factors of carbon emissions from transportation, whereas energy intensity, transportation structure, industry development scale, and government intervention were the negative driving factors. ③ Energy intensity and transportation structure were the main driving factors for the spatial variation of transportation carbon emissions, and most of them would produce nonlinear enhancement when they were spatially superimposed with other factors, that is, there was strong synergy among driving factors. The results showed that the provincial traffic carbon emissions along the "Belt and Road" were affected by the surrounding areas, the influence degree was increasing, and there was synergy between the key driving factors of traffic carbon emissions. Therefore, it is suggested that the provinces along the "Belt and Road" should fully consider the spatial and temporal heterogeneity of traffic carbon emission influencing factors and formulate differentiated traffic carbon emission reduction policies.