Inverse U-shaped Relationship Research Articles

Determinants of German firm’s adjusted effective tax rate

ABSTRACT This analysis examines firm-specific determinants of the effective tax rate of German limited liability companies. The effective tax rate is calculated by considering the local trade tax, corporate profit tax, and solidarity tax for 9,318 firms from 2020 based on the Orbis data base. Our findings demonstrate a inverse u-shape relationship between the effective tax rate and firm size. Furthermore, companies with major shareholders tend to have lower tax rates, while those with a supervisory board tend to pay higher tax rates on average. These findings are consistent with the theoretical considerations on tax aggressiveness.

Aluminum demand and low carbon development scenarios for major countries by 2050

Aluminum is a widely used energy-intensive material and the second largest source of carbon emissions from metal after steel. Global demand for aluminum has grown rapidly since 1970 and has shown a high correlation with population and economic growth. These factors have posed challenges to carbon reduction of aluminum industry. Therefore, it is crucial to investigate global aluminum demand and emissions to develop low carbon pathways. However, few studies have conducted a comprehensive analysis of the global aluminum industry. We develop different scenarios of joint abatement measures to explore pathways for the aluminum industry to significantly reduce carbon emissions by 2050. Three scenarios are considered, namely, moderate mitigation scenario (MMS), enhanced mitigation scenario (EMS), and deep mitigation scenario (DMS). The results show that: 1) Aluminum industry has a high potential for carbon emission reduction. The emissions in the three scenarios will be reduced by 33%, 77% and 85% by 2050 compared to 2020, respectively. 2) The carbon emission reduction effect of energy structure optimization and low carbon technology application is significant, with the use of clean energy playing a decisive role. 3) There is an inverse U-shaped curve relationship between per capita primary aluminum demand and per capita GDP. The aluminum demand in China and India is still growing at a high rate, and carbon emissions are always at the top. This study will effectively support the development of a low-carbon transition path for the global aluminum industry.

Do scarce resource inputs promote or reduce patent values and innovation? A game theory approach

ABSTRACT Both patent price and innovation play crucial roles in the patent market and this article studies patent values under capacity or resource constraints using a game theory approach. First, patent industrialization advances consumer surplus in all situations. Second, under a monopoly, there is an inverse U-shaped relationship between the patent value and the total amount of a resource. Third, under an oligopoly with nonbinding capacity constraints, the patent value decreases as the total amount of the resource increases. Finally, the overall relationship between the patent value and the total amount of the resource under an oligopoly also has an inverse U-shape.

Association Between Cardiovascular Health and Cirrhosis and Mortality: Insights From a Comprehensive Cross-sectional Study.

We aim to explore the relationship between the newly introduced CVH indicator "Life's Essential 8 (LE8)" and cirrhosis. The global burden of cirrhosis is increasing, with a rising number of deaths, leading to significant societal and economic challenges. Cardiovascular health (CVH) has been found to have potential associations with liver diseases. All participants aged 20 and older from National Health and Nutrition Examination Survey 2005 to 2018 were included. CVH was accessed by LE8, consisting of 4 health behaviors (diet, physical activity, nicotine exposure, and sleep health) and 4 health factors (body mass index, lipid levels, blood sugar, and blood pressure). Cirrhosis was determined based on abnormal liver function test results, with an aspartate aminotransferase to platelet ratio index >2. Participants' mortality status was obtained by matching with the National Death Index and all-cause mortality served as the follow-up endpoint. This extensive cross-sectional study reveals that LE8 was not associated with cirrhosis. A higher health behaviors score was associated with lower cirrhosis. Moreover, there is an inverse U-shaped relationship between the LE8 score and all-cause mortality in participants with cirrhosis, signifying a decrease in all-cause mortality when LE8 surpasses 60. A greater health behaviors score is linked to a decreased proportion of all-cause mortality in cirrhosis patients. Maintaining better health behaviors may be beneficial for cirrhosis, especially through a balanced diet, regular exercise, smoking cessation, and quality sleep.

How do financial constraints and market competition affect innovations: Evidence from Vietnam

This study delves into the effects of market competition and financial constraints on innovation within a transitional market. We implemented the Two Stage Least Squares regression to analyze a sample comprising 492 listed firms in Vietnam from 2008 to 2020. Our findings unveil an inverse U-shaped relationship between market competition and R&D intensity. Secondly, our study highlights the significant negative impact of financial constraints on R&D intensity. Thirdly, our research demonstrates the robustness of the nonlinearity of competition within small and medium-sized enterprises (SMEs). Our findings are consistent with agency theory, real options theory, and existing literature. Finally, our study offers practical implications for managers and policymakers aiming to foster innovation in developing countries, particularly amidst the digital transformation era.

The Inverted U-Shaped Association between Serum Vitamin D and Serum Uric Acid Status in Children and Adolescents: A Large Cross-Sectional and Longitudinal Analysis.

Serum vitamin D is associated with hyperuricemia. However, previous studies have been controversial, with limited focus on children and adolescents. This study aimed to examine the cross-sectional and longitudinal associations between serum vitamin D and serum uric acid (SUA) levels in children and adolescents. The cross-sectional survey comprised 4777 participants aged 6 to 18 years, while the longitudinal survey involved 1641 participants aged 6 to 12 years, all derived from an ongoing cohort study in Shenzhen, China. Restricted cubic splines were used to visualize the dose-response relationship between vitamin D and SUA and the risk of higher SUA status. Two-segment generalized linear models (GLM) and logistic models were used to assess the association between vitamin D and SUA and higher SUA status, respectively. The longitudinal analysis used GLM. We observed an inverted U-shaped relationship between vitamin D and SUA (p-overall < 0.0001, p-nonlinear = 0.0002), as well as the risk of higher SUA status (p-overall = 0.0054, p-nonlinear = 0.0015), with the vitamin D inflection point at 24.31 and 21.29 ng/mL, respectively. A 10 ng/mL increment in 25(OH)D3 levels, when below 20.92 ng/mL, was associated with a 68% rise in the risk of higher SUA status (OR: 1.68, 95%CI: 1.07-2.66). Conversely, when 25(OH)D3 levels were above or equal to 20.92 ng/mL, a 10 ng/mL increment was associated with a 45% reduction risk of higher SUA status (OR: 0.55, 95%CI: 0.36-0.84). Longitudinal analysis indicated that the annual change of SUA was from -4.80 (β, 95%CI: -10.74, 1.13) to -9.00 (β, 95%CI: -15.03, -2.99) and then to -6.77 (β, 95%CI: -12.83, -0.71, p for trend = 0.0212) μmol/L when increasing the quartile of vitamin D3. An inverse U-shaped relationship was observed between vitamin D and SUA as well as the risk of higher SUA status. Sufficient vitamin D levels appear to play a preventative role against the age-related increase in SUA. Ensuring adequate vitamin D levels may be beneficial in improving uric acid metabolism.

Supplier concentration and debt maturity structure

PurposeThis paper takes Chinese A-share listed companies from 2007 to 2021 as research samples to investigate the influence of supplier concentration on debt maturity structure and its mechanism. It further analyzes whether the relationship between the two is different in the case of different monetary policies, collateral assets, and total debt. The research conclusion is of practical significance for enterprises to construct a balanced debt maturity structure and prevent financial risks.Design/methodology/approachThis paper adopts the empirical research method. The data came from the CSMAR database, which eliminated ST and *ST and companies with missing data, resulting in a sample of 20,328. Stata16 was used for statistical analysis.FindingsThere is an inverted U-shaped relationship between supplier concentration and debt maturity structure, and market position and trade credit play an intermediary role. In the case of tight monetary policy, fewer collateral assets, and higher total debt, the inverse U-shaped relationship is more significant.Originality/valueThis paper examines the relationship between supplier concentration and debt maturity structure from a non-linear perspective for the first time, providing theoretical support for enterprises to form a reasonable debt structure, and deepening the theoretical cognition of the relationship between supplier concentration and corporate debt maturity structure.

The impact of investor sentiment on stock liquidity of listed companies in China

Researchers have scrutinized the link between investor sentiment and stock market liquidity globally, yet few have delved into this dynamic in emerging markets, especially China. Utilizing a sample of 1,839 publicly listed companies in China from 2010 to 2019, this study applies firm- and year-fixed-effects models to explore the nexus between investor sentiment and stock illiquidity, employing the Amihud measure for stock illiquidity assessment. The outcomes of these fixed-effect regressions illustrate a significantly positive relationship between investor sentiment and stock liquidity in the Chinese market. The positive link is more evident in scenarios characterized by high firm leverage, rapid revenue growth, larger corporations, greater institutional ownership, higher stock volatility, and lower book-to-market ratios. Intriguingly, this analysis incorporates the quadratic term of investor sentiment to examine the potential for a nonlinear dynamic between stock illiquidity and investor sentiment. The findings elucidate that the effect of investor sentiment on stock liquidity diminishes at elevated levels of sentiment, revealing a nonlinear inverse U-shaped relationship. The positive correlation between investor sentiment and stock liquidity persists across the three divisions of the Chinese Shenzhen Stock Exchange and remains robust using alternative liquidity measures, such as Roll’s impact and zeros impact. Addressing causality concerns, current investor sentiment appears to influence subsequent liquidity levels. These results provide valuable perspectives for policymakers, business executives, and investors in the stock market. Acknowledgment This research was funded by the Department of Education of Zhejiang Province General Program [Y202353438], the Wenzhou Association for Science and Technology—Service and Technology Innovation Program [jczc0254], the Wenzhou-Kean University Student Partnering with Faculty Research Program [WKUSPF2023004], and the Wenzhou-Kean University International Collaborative Research Program [ICRP2023002].

The Influence of Demand-Based Policy Instruments on Urban Innovation Quality—Evidence from 269 Cities in China

Enhancing the quality of urban innovation is a powerful strategy for advancing urban sustainability. A strong public innovation policy is a crucial building block for advancing urban innovation quality. This study identifies innovative procurement instances from over 640,000 public procurement contract data through textual analysis to investigate how urban innovation quality could benefit from demand-based policy instruments. The study’s findings indicate the following: (1) It provides evidence that the adoption of public innovation procurement has a significant impact on urban innovation quality, suggesting an inverse U-shaped relationship between the two. (2) Heterogeneity analysis reveals public innovation procurement stimulates urban innovation quality more remarkably in cities with provincial status and provincial capitals, as well as in eastern cities. (3) We discovered that it is not possible to increase the quality of urban innovation in the city when human capital in the city is performing poorly and when there is also a lack of external technology and entrepreneurial activity. Finally, this paper argues that our findings also provide important insights for the development of proactive innovation policy instruments, the construction of innovative cities, and the realization of sustainable development in countries around the world, especially in developing countries.

Why a lot of grandiose narcissism can be a good thing for leadership effectiveness: Political skill as game changer

We tested the productively tempering role of political skill, which is a developed level of social skill and an acquired interpersonal competence, on the relation between leader grandiose narcissism and leadership effectiveness. In a sample of 640 supervisors and 1259 employees, we found that at high levels of leader political skill, both low and high leader grandiose narcissism have beneficial consequences for leadership effectiveness, yielding a U-shaped relation between grandiose narcissism and leadership effectiveness. Individuals high on political skill and grandiose narcissism have the self-control capacity to temper aggressive impulses and simultaneously productively package and present their desire for admiration and adulation in a manner that allows them to gain subordinates' acceptance. Individuals low on grandiose narcissism display high honesty-humility. Supervisors high in political skill and low in grandiose narcissism effectively direct their motive to get along (honesty-humility) to be well-received by subordinates. If leader political skill is low, we found the inverse U-shaped relation between grandiose narcissism and leadership effectiveness previously established in meta-analytic research. Our findings show that higher levels of political skill are helpful for leaders both high and low on grandiose narcissism.

Intellectual property protection and enterprise innovation: Evidence from China

In this paper, we introduce a conceptual framework to scrutinize the non-linear correlation between intellectual property protection and enterprise innovation performance using panel data (2012–2020) from listed firms. The results exhibit an inverted U-shaped relationship of IPP on EIP. Our analysis underscores the important role of R&D intensity and disclosure quality in this relation, identifying them as potential transmission channels for IPP's effect on EIP. Furthermore, empirical evidence suggests that when companies are state-owned or located in innovative pilot cities, the inverse U-shaped relationship becomes more pronounced. Conversely, this relationship is significantly weakened in markets with lower levels of competition.

ESG resilience: Exploring the non-linear effects of ESG performance on firms sustainable growth

Using a sample of United States (US) and Chinese listed firms from 2018 to 2022, we investigate the non-linear effect of overall ESG performance on the firm’s sustainable growth. Additionally, our analysis involves the decomposition of ESG into its environmental, social, and governance components to examine their individual effects on sustainable growth. High Dimension Fixed Effects, and dynamic panel generalized method of moments key findings reveal a positive effect of overall ESG performance on sustainable growth but as ESG performance increases, the positive impact on firms sustainable growth diminishes and eventually turns negative, indicating an inverse U-shaped relationship. Furthermore, our findings show that not all ESG components exert an equivalent influence on sustainable growth. Specifically environmental and social performance have a greater effect on sustainable growth, highlighting the unequal impact of different ESG dimensions. Sub-sample analysis further accentuates the concept of an optimal level of ESG performance. These findings persist across various measures, estimators, and subgroup analyses. Overall, the results reveal novel non-linear patterns in ESG performance, providing valuable insights for management, investors, and policymakers.

How Does the Level of Control, Support, and Social Integration of the Parent Firm Affect the Exploitative/Explorative Capabilities of the Foreign Subsidiary? Empirical Evidence from Korean Listed Firms

Purpose - Based on organizational learning theory, this study empirically analyzes the effect of the control level, support level, and social integration level of the headquarters on the exploitative and explorative capabilities of foreign subsidiaries. Design/Methodology – To test the research hypotheses, a survey of foreign subsidiaries of Korean listed firms was conducted, and regression analysis was performed on the 400 returned data. Findings - The analysis reveals that the level of parent control does insignificantly affect the exploitative capabilities of foreign subsidiaries but had a negative effect on the explorative capabilities of foreign subsidiaries. The level of support from the parent firm is found to have a positive effect on the exploitative capabilities of foreign subsidiaries. However, a U-shaped relationship exists between parent support and the explorative capabilities of foreign subsidiaries. The level of social integration is found to have a positive effect on the exploitative capabilities of foreign subsidiaries, but an inverse U-shaped relationship exists between the explorative capabilities of foreign subsidiaries. Originality/value - Based on organizational learning theory, this study has useful implications. It shows that the control, support, and social integration level of parent firms have different effects on the exploitative and explorative capabilities of foreign subsidiaries.

Balancing acts of kindness: Reassessing the relationship between informal helping and formal volunteering

Although time is a finite resource, much sociological research suggests a positive association between engagement in informal helping activities and formal volunteering. However, it remains unclear whether this relationship is causal and, if so, in which direction the causality runs. To address these issues, I draw on two-wave panel data from Denmark. Using a cross-lagged panel model, I find no evidence that formal volunteering hours affect informal helping activities. However, in the reverse direction, I find evidence of a right-skewed inverse U-shaped relationship. Specifically, the time individuals dedicate to formal volunteering marginally increases with time allocated to informal helping activities, but only as long as their informal helping obligations remain modest. However, once these informal helping obligations reach approximately 20 hours, the time individuals spend on formal volunteering decreases with informal helping hours. These findings suggest that even exceptionally helpful individuals, often referred to as “super-helpers,” must balance their acts of kindness and their available time and energy. Moreover, I argue that while many people are motivated to engage in formal volunteering to benefit others, those with family and friends requiring assistance tend to prioritize these responsibilities before volunteering.

The quest for an optimal capital structure: an empirical analysis of European firms using GMM regression analysis

Purpose This paper explores the connection between capital structure and financial performance within European listed firms. The primary objective is to demonstrate an inverse U-shaped relationship between these two variables and pinpoint an optimal debt-equity mix.Design/methodology/approach In this study, we adopt a dynamic modeling approach to investigate the relationship between a firm’s capital structure and financial performance. Drawing on well-established theories and prior empirical studies, our model examines 3,121 dividend-paying firms from 41 European countries over 14 years, from 2008 to 2021. To enhance the reliability of our findings, we employ two distinct estimation techniques: the fixed effect model (FE) and the system generalized method of moments (System-GMM).Findings This study reveals an inverse U-shaped relationship between the firm’s financial performance, measured by the return on equity (ROE) and its capital structure (total liability to total assets ratio). Furthermore, an optimal capital structure of about 29% is determined for all firms in the sample, and about 21%, 28% and 41% industry-specific capital structure for manufacturing, real estate and wholesale trade, respectively.Originality/value This paper contributes to existing knowledge by empirically determining an optimal capital structure for listed firms across various industries in Europe, which very few studies have attempted to do in the past. An optimal capital structure is an invaluable benchmark for managers and other stakeholders, informing their decision-making.

Regional institutional environment and R&amp;D performance: Evidence from marketization index of China’s provinces and panel data of high-tech manufacturing firms

Purpose How does the regional institutional environment of China’s transitional economy influence the relationship between a firm’s R&amp;D investment intensity and innovation performance? Based on the resource-based view and institution-based view, an empirical study was executed to identify the moderating effects of institutional environment variables from the Marketization Index of China’s Provinces: National Economic Research Institute (NERI) Report on the relationship between a firm’s R&amp;D investment intensity and innovation performance. This paper aims to study how effectively improve the impact of R&amp;D investment intensity on innovation performance under the influence of the institutional environment. Design/methodology/approach Against the background of China’s transitional economy, the authors present empirical evidence from panel data covering 374 Chinese A-share listed high-tech manufacturing firms on the Shanghai and Shenzhen Stock Exchange to examine the relationship between R&amp;D investment intensity and innovation performance. Findings Empirical results illustrate the following: The R&amp;D investment intensity and innovation performance displayed an inverse U-shaped relationship, and R&amp;D investment intensity had a lagged effect on R&amp;D output according to the uncertainty and industrialization period of R&amp;D activities. The level of financial market development can intensify the effects of R&amp;D investment intensity on innovation performance. The degree of government intervention weakens the effect of R&amp;D investment intensity on innovation performance. Originality/value Based on the background of China’s institutional environment during the transition period, combined with previous research and the Marketization Index of China’s Provinces: NERI Report, selecting financial market development, government intervention level and legalization level as moderating variables to study how effectively improve the impact of R&amp;D investment intensity on innovation performance under the influence of the institutional environment. Due to the different ownership of firms during the transition period, the appropriate impact of the institutional environment on the relationship between R&amp;D investment intensity and innovation performance will vary. Moreover, the level of legalization would impact on innovation insignificantly.

Nonlinear effects of enterprise digital transformation on environmental, social and governance (ESG) performance: evidence from China

PurposeThe purpose of this study is to investigate whether the corporate environmental, social and governance (ESG) performance of enterprise is influenced by the enterprise digital transformation. In addition, this study explains how enterprise digital transformation affects ESG performance.Design/methodology/approachThe sample covers 4,646 nonfinancial companies listed on China’s A-share market from 2009 to 2021. The study adopts the fixed-effects multiple linear regression to perform the data analysis.FindingsThe study finds that enterprise digital transformation has a significant inverted U-shaped impact on ESG performance. Moderate digital transformation can improve enterprise ESG performance, whereas excessive digital transformation will bring new organizational conflicts and increase enterprise costs, which is detrimental to ESG performance. This inverted U-shaped effect is more pronounced in industrial cities, manufacturing industries and enterprises with less financing constraints and executives with financial backgrounds. Enterprise digital transformation mainly affects ESG performance by affecting the level of internal information communication and disclosure, the level of internal control and the principal-agent cost.Practical implicationsThe government should take multiple measures to encourage enterprises to choose appropriate digital transformation based on their own production behaviors and development strategies, encourage them to innovate and upgrade their organizational management and development models in conjunction with digital transformation and guide them to use digital technology to improve ESG performance.Social implicationsThis study shows that irrational digital transformation cannot effectively improve the ESG performance of enterprises and promote the sustainable development of the country. Enterprises should carry out reasonable digital transformation according to their own development needs and finally improve the green and sustainable development ability of enterprises and promote the sustainable development of society.Originality/valueThis study examines the relationship between enterprise digital transformation and ESG performance. Different from the linear relationship between the two in previous major studies, this study proves the inverse U-shaped relationship between enterprise digital transformation and ESG performance through mathematical theoretical model derivation and empirical test. This study also explores in detail how corporate digital transformation affects ESG performance, as well as discusses heterogeneity at the city, industry and firm levels. It is proposed that enterprises should take into account their own characteristics and carry out reasonable digital transformation according to their development needs.

Behavioural factors matter for the adoption of climate-smart agriculture

Increasing agricultural productivity while ensuring environmental sustainability are two important targets in achieving the sustainable development goals under climatic shocks. In this regard, different climate-smart agricultural (CSA) practices have been recommended and promoted to meet these goals and targets. However, the adoption of these practices remains low and variable. For the most part, low adoption has been attributed to external factors. Behavioural and psychological factors also matter but have received little empirical and policy attention. In this study, we examine the relationship between aspirations, aspiration gaps, and the adoption of CSA practices such as crop rotation, intercropping, fallowing, and organic soil amendments. Employing parametric and non-parametric estimation techniques on a pooled farm household survey from Cameroon and Kenya, we show that aspirations are associated with the use of crop rotation and organic soil amendments. We also investigate the theorized non-monotonic inverse U-shaped relationship between aspiration gaps and investments. We find evidence of this relationship for the adoption of these CSA practices, suggesting an aspiration failure for smallholder farmers. These results imply that aspirations that are ahead but not too far ahead of the current state serve as the best incentives for stimulating the adoption of CSA practices. Employing the multivariate probit model, we further highlight interdependencies in the use of these CSA practices. Specifically, we underscore significant complementarities, suggesting the bundled use of these practices. Overall, the analysis demonstrates that aspirations matter for farmer decision-making with many implications for agricultural, food, and environmental policies.

Exploring the link between economic policy uncertainty, financial development, ecological innovation and environmental degradation; evidence from OECD countries.

Governments have been concerned with balancing economic growth and environmental sustainability. Nevertheless, it has been noted that sustainable development is interconnected with economic variables, the institutional framework, and the efficacy of ecological regulatory measures. This study experimentally examines the correlation of economic policy uncertainty (EPU), financial development (FD), ecological innovation (EI), corruption (IQ), foreign direct investment (FDI), trade openness (TR), natural resource rent (NRR), and CO2 emission. We utilized longitudinal data from the Organization for Economic Cooperation and Development (OECD) countries from 2003 to 2021 to address the existing research void. This study used sequential processes of the linear panel data model (SELPDM) and the SYS-GMM approaches in obtaining consistent and efficient results. The inverse U-shaped relationship between FD and environmental degradation (ED) is confirmed by the long-term elasticity estimates generated by the SELPDM method Elasticity estimates for the long-run show that rigorous ecological regulations, higher renewable energy utilization, higher FD and less corruption, an interaction between FD and rigorous ecological regulations all contribute to reduced ED. Its also being observed that both EPU, FDI and trade openness are positively affecting the ED. It confirms the idea of pollution refuge between the OECD countries. The causality test results show that corruption and FD had reciprocal links with ED, while FDI, trade openness and strict environmental policies were also found to have bidirectional linkage with ED. To achieve sustainable development and prevent environmental degradation in the long term, we propose implementing an institutional financial framework and FD in OECD nations. This may be accomplished by focusing on the effectiveness of environmental regulatory laws and creating a conducive institutional environment.

Aesthetic valence: Psychophysical perspectives.

Comparisons of aesthetic valence and of sensory magnitude are subject to similar order effects, indicating an evolved mechanism that sharpens also aesthetic discrimination. As the foundation of pleasantness and aesthetic valence of an object, an optimal level of evoked arousal or, in more recent research, of information load, has been proposed. According to discrepancy theory, this evoked effect is modulated by the object's deviation from the current adaptation level (AL). The AL is built up and updated by pooling recent stimulation. A model based on these concepts is proposed here, and it is illustrated by results of empirical studies by the author's students. For everyday objects such as cars and ladies' clothes, rated beauty was related by a U-shaped function to rated modernity. Minimal beauty occurred for intermediate modernity. For ladies' clothes, this minimum was situated higher on the modernity scale for females and extraverts. As modernity can be seen as the amount of deviation from the AL which represents the usual, this shift could be explained by faster upward adjustment of the AL. In contrast, for paintings the relation between modernity and beauty was inversely U-shaped. This could be due to paintings intrinsically carrying more information than other objects, as indicated by ratings of hard-to-access, with which rated beauty had an inverse U-shaped relation. In a factor-analytic study of preference for 42 paintings four orthogonal factors were extracted, interpreted as High and Low modernity, and High and Low information content. This could yield a rudimentary empirical typology of art.