Panel Fixed Effect Model Research Articles

Destroying Democracy for the People: The Economic, Social, and Political Consequences of Populist Rule, 1990 to 2017

ABSTRACT The recent populist wave has raised questions about the implications of populism for democracy. Some scholars express optimism that populism may be a source of democratic revitalization, bringing about sweeping changes in accordance with the majority will. More often, populism is viewed as a threat to liberal democracy, combining calls for radical change with disdain for core democratic institutions and norms. We consider the possibility that these outcomes may not be mutually exclusive and develop a conceptual typology for understanding the consequences of populist rule. We then use cross-national panel fixed-effects models to analyze the effects of populist leadership between 1990 and 2017. We first examine whether populists have economic and social effects in line with their core aspirations. Left-wing populists are quite effective at implementing their agenda: they reduce income inequality, regulate markets, and incorporate marginalized groups. Right-wing populists are also fairly impactful: for instance, they raise tariffs, cut taxes, and restrict the rights of women and gay people. However, populists of all stripes are associated with the rapid and severe erosion of liberal democratic institutions. Populists, we conclude, often destroy democracy in the name of the people.

The Impacts of Digital Economy on Balanced and Sufficient Development in China: A Regression and Spatial Panel Data Approach

The digital economy can change the proportions and types of production factors, gradually replace traditional backward production factors, reconstruct the division of labor and cooperation system, and improve productivity, which is an important basis for balanced and sufficient development. This paper measures the comprehensive level of the digital economy and balanced and sufficient development, by using Chinese provincial panel data from 2013 to 2021, and uses the panel fixed effect model, mediation effect model, and spatial econometric model to examine the digital economy’s effect on balanced and sufficient development as well as the digital economy’s mechanism. The results show that the digital economy has significantly promoted balanced and sufficient development, though there are obvious regional heterogeneity and spatial spillover effects, and the relevant conclusions are still valid after an endogenous treatment and a robustness test. The total factor productivity is an important mechanism for the digital economy to affect balanced and sufficient development.

Corporate Innovation Incentive Policy During Business Cycles: Fiscal Subsidies or Tax Incentives?

ABSTRACT This paper empirically tests the incentive effect of fiscal policy on corporate innovation from 2007 to 2019 in China. With data from A-share-listed companies in the China Stock Market & Accounting Research (CSMAR) and Wind databases and GDP data from the National Bureau of Statistics of China (NBSC), the paper uses the Hodrick – Prescott (HP) filter method and a panel fixed effects model to empirically test the incentive effect of fiscal and tax policies on corporate innovation, compares the incentive differences between tax incentives and fiscal subsidies across different business cycles, and conducts heterogeneity analysis. The study finds that although fiscal subsidies and tax incentives promote enterprise innovation, the innovation incentive effect of fiscal subsidies is greater during an economic downturn than during an upturn. In contrast, tax incentives are stronger during an economic upturn than during a downturn. The results of this research may help to develop economic policies and to guide the precise implementation of tax and fee reductions.

Has Digital Finance Made Marine Energy Carbon Emission More Efficient in Coastal Areas of China?

Energy is an essential material foundation for ensuring economic sustainability and national security. With the development of digitalization, the importance of digital finance in promoting the green and low-carbon transformation of the economy has emerged. The ocean is a national energy treasure house. In order to explore whether digital finance improves the carbon emission efficiency of marine energy, this paper selects panel data from 11 coastal areas from 2011 to 2019 in China and uses the panel fixed effect model, mediation, and moderation model to analyze the mechanism between them empirically. The results show that: (1) digital finance improves marine energy carbon emission efficiency, and the depth of use has the most obvious effect; (2) the incentive effect is heterogeneous due to different geographical locations, resource endowment degree, and digitalization degree; (3) the marine energy consumption structure plays a mediating effect, and marine industrial structure and technological innovation can enhance the impact of the digital finance on marine energy carbon emission efficiency. Therefore, optimizing the energy consumption structure and giving full play to the effect of digital finance in promoting the efficiency of marine energy carbon emission to help accelerate the low-carbon development of China’s economy and the realization of carbon emission reduction.

The impact of the urban park sunset rule on land value: The case of Yongin in Gyeonggi Province, South Korea

Intense urbanization across the world has increased land scarcity, making it challenging to secure land for public parks and open spaces. To construct urban green space, the Korean government expropriated 904.1 km2 of private land from the 1960s onward. However, under the Urban Park Sunset Rule (UPSR), approximately 405.7 km2 of undeveloped green space sites were released and returned to their owners by 2020. This study investigates the time-varying effect of the UPSR using a two-way fixed effect panel model, covering the period from announcements of the UPSR in 2000 and 2005 to its implementation from 2015 to 2020. We found that the UPSR exerted a small positive externality on the adjacent land market. After the first UPSR announcement, the effect was negative for several years; however, released land began to exert a stronger positive externality after the second announcement, and the maximum effect was observed two years after the first implementation: a 5.71% increase in value per 100-m approach to the subject land. Before the first announcement, the effect was mainly observed within 500 m of released sites. After the second announcement, the effect was observed within the 500–1000-m zone. This study suggests that land use deregulation may generate effects in nearby areas that vary in terms of distance and magnitude in relation to the timing of announcements and implementation.

Analyzing the effects of actions followed by the Central Bank of Jordan during COVID-19 pandemic on financial performance of Jordanian banks

PurposeThis study analyzes the impact of the procedures followed by the Central Bank of Jordan during the COVID-19 pandemic on the financial performance of Jordanian banks listed on the Amman Stock Exchange over the period (2019Q1–2021Q3).Design/methodology/approachThe panel fixed effect model was used to measure the impact of each of the required reserve ratios and the deferred loans on the profitability of Jordanian banks represented by the return on total assets.FindingsThe results revealed a negative relationship at the significance level of 10% between the required reserve ratio and the return on total assets. Also, there is a negative relationship at the significance level of 5% between the deferred loans and the return on total assets.Research limitations/implicationsThe paper recommends the Central Bank of Jordan following a precautionary policy to encounter systematic risks that cannot be eliminated by using diversification.Originality/valueWith the severe impact of the Coronavirus pandemic on the overall economic performance of the national economic sectors and the subsequent negative impact on the living standard of society’s members, this study shows the government’s role represented by the procedures of its monetary authority (Central Bank of Jordan) to mitigate the effects of this pandemic, as well as measuring the impact of these procedures on the financial performance of Jordanian banks listed on the Amman Stock Exchange.

Research on Dynamic Capability and Enterprise Open Innovation

Chinese firms urgently need to use open innovation models to access external knowledge, resources, and skills to improve their internal innovation performance and achieve innovation catch-up. Using a dataset of joint patent applications of Chinese-listed manufacturing firms from 2006–2018, we construct a panel fixed-effects model to empirically test the effect of dynamic capabilities on firms’ open innovation. The results show that dynamic capabilities can effectively promote firms’ open innovation activities. In addition, the different dimensions of dynamic capabilities, namely sense capabilities, absorptive capabilities, complementary capabilities, and coordinative capabilities, also have significant incentive effects on firms’ open innovation. The results of the extended analysis show that dynamic capabilities have heterogeneous effects on the open innovation activities of different types of firms. Specifically, the impact of dynamic capabilities on open innovation is stronger for private firms, large and medium-sized firms, and multinational firms. The findings of this paper can provide important theoretical support and management insights for governments and enterprises to effectively manage the “paradox of openness” problem, thereby enhancing the firm’s innovation capability and achieving major bottleneck breakthroughs in key and core technologies.

Green Finance, International Technology Spillover and Green Technology Innovation: A New Perspective of Regional Innovation Capability

Regional green technological progress is an important driver of regional green technology innovations. To explore in depth the impact of green finance and international technology spillover on regional green technology innovation, this study incorporates green finance, international technology spillover, and green technology innovation into the same analytical framework. In addition, based on a new perspective of regional innovation capabilities, this study analyzes the impact of green finance and international green technology spillovers on green technology innovation. The data were collected in 30 Chinese provinces from 2003 to 2019 and analyzed by a panel fixed-effects model. The interaction between green finance, international technology spillover, and regional innovation capability was investigated to understand the impact of each interaction on green technology innovation. Second, regional innovation capability was used as an intermediary variable to identify its underlying mechanism. Finally, the spatial spillover effect of green technology innovation was analyzed using the spatial Durbin model. We found that: (1) green finance, import trade, outward foreign direct investment (OFDI), and regional innovation capability can promote regional green technology innovation, while inward foreign direct investment (IFDI) has an inhibitory effect on the innovation; (2) the interaction of green finance, international technology spillovers, and regional innovation capacity positively impacts green technology innovation; (3) green finance and international technology spillovers can promote green technology innovation by promoting regional innovation capabilities; (4) and green technology innovations have spatial spillover effects, and innovations in one region can promote the growth of green technologies in adjacent regions. This study provides a reference not only for China but also for other developing countries to promote green technology advancement and achieve sustainable development goals.

Indirect effects of COVID-19 on maternal and child health in South Africa

ABSTRACT Background The unfinished burden of poor maternal and child health contributes to the quadruple burden of disease in South Africa with the direct and indirect effects of the COVID-19 pandemic yet to be fully documented. Objective To investigate the indirect effects of COVID-19 on maternal and child health in different geographical regions and relative wealth quintiles. Methods We estimated the effects of COVID-19 on maternal and child health from April 2020 to June 2021. We estimated this by calculating mean changes across facilities, relative wealth index (RWI) quintiles, geographical areas and provinces. To account for confounding by underlying seasonal or linear trends, we subsequently fitted a segmented fixed effect panel model. Results A total of 4956 public sector facilities were included in the analysis. Between April and September 2020, full immunisation and first dose of measles declined by 6.99% and 2.44%, respectively. In the follow-up months, measles first dose increased by 4.88% while full immunisation remained negative (−0.65%) especially in poorer quintiles. At facility level, the mean change in incidence and mortality due to pneumonia, diarrhoea and severe acute malnutrition was negative. Change in first antenatal visits, delivery by 15–19-year olds, delivery by C-section and maternal mortality was positive but not significant. Conclusion COVID-19 disrupted utilisation of child health services. While reduction in child health services at the start of the pandemic was followed by an increase in subsequent months, the recovery was not uniform across different quintiles and geographical areas. This study highlights the disproportionate impact of the pandemic and the need for targeted interventions to improve utilisation of health services.

Linking chronic diseases, cognitive impairment and depressive symptoms in Chinese older adults: A three-wave population-based longitudinal study

ObjectiveDespite previous studies illustrate that chronic diseases are risk factors for older adults' psychological health, little is known about its mediating mechanism. This study aims to examine the mediating effect of cognitive impairment. Also, a particular emphasis is placed on whether the Hukou system in China contributes to the adverse effect of chronic diseases on depressive symptoms. MethodsUsing the 2014, 2016 and 2018 rounds of the China Longitudinal Aging Social Survey (CLASS), this study estimates fixed-effect panel models for the effect of chronic diseases on depressive symptoms and the mediating effect of cognitive impairment. Meanwhile, the interaction effect of chronic diseases and hukou status on depressive symptoms is also examined. ResultsThe significant relationship between chronic diseases and depressive symptoms is supported in Chinese older adults and this association is found to be mediated by cognitive impairment. Moreover, no urban-rural disparities exist in the effect of chronic diseases on depressive symptoms. LimitationAll of the measures in this study are relied on self-report, which may result in reporting biases. ConclusionThis study contributes to our understanding of the relationship between chronic diseases and depressive symptoms and extends the previous literature by considering the Hukou status, a highly distinctive Chinese variable. Practical implications for policy development and intervention design are also provided.

Greenhouse gas emissions and stock market volatility: an empirical analysis of OECD countries

PurposeThis study aims to explore empirical evidence of the impact of greenhouse gas (GHG) emissions on stock market volatility.Design/methodology/approachUsing panel data of 35 Organization for Economic Co-operation and Development countries from 1992 to 2018, we conduct both fixed effects panel model and Prais-Winsten model with panel-corrected standard errors.FindingsThe authors document that there is a significant positive relationship between GHG emissions and stock market volatility. The results remain robust after controlling for potential endogeneity problems.Originality/valueThis study contributes to the literature in that it provides additional empirical evidence for the financial risk posed by climate change.

How Fintech Affects Economic Development

Based on the annual provincial panel data from 2011 to 2020, this paper uses fixed-effect panel model and threshold-effect model to study the impact of fintech on economic development. The results show that fintech has a significant positive impact on economic development and heterogeneity, and the contribution of fintech to economic development is relatively high in the eastern region. Further using the threshold effect model, it is found that different levels of fintech have different effects on economic development.

Effects of Economic Policy on Firm Performance in Developed and Developing Countries

This paper analyzes the effects of economic policy on firm performance in developed and developing countries, using a sample of firms classified by turnover. The methodology refers to the estimation of the dynamic panel fixed effects model. The results show that the priority economic policy tools based on price, balance of payments and employment control do not influence firm performance. However, debt increases the performance of firms in Africa. In high-income countries and China, it is savings and exchange rate policies that have a positive effect on firm performance. It is recommended that policymakers in Africa adopt a debt policy based on borrowing in compliance with ceilings and concessional interest rates so as not to increase debt service and suffocate the government’s cash flow. In developed countries, the savings policy must be maintained at the same pace as the mobilization of savings to meet the needs of growth sectors. Exchange rate policy must be able to absorb shocks and always adapt to the market.

Digital economic and circulation industry -- The mediator effect based on green technologic innovation

So as to explore the mediator effect of green technologic innovation on the impact of digital economic on circulation industry, based on the panel data of 30 provinces in China from 2011 to 2019, this paper constructs a panel fixed effect model and a mediator effect model for empirical analysis. The results show that the digital economic significantly boosts the advance of the circulation industry; through the mediator effect model test, it is found that the digital economic can boost the advance of the circulation industry through green technologic innovation, and the mediator effect is 57.28 %. Finally, from the aspects of strengthening green technologic innovation, talent support, improving digital economic infrastructure and policy support, this paper puts forward some suggestions on promoting the advance of circulation industry by digital economic.

Social Endowment Insurance and Inequality of the Household Portfolio Choice: The Moderating Effect of Financial Literacy

China implements different social endowment insurance policies between urban and rural areas which may cause differences in investment decisions of urban and rural households. Based on the 2013 to 2017 China Household Finance Survey (CHFS) data and the two-way fixed effect panel model, this study aims to investigate the effect of social endowment insurance on the inequality of household portfolio between China’s urban and rural areas and the moderating effect of financial literacy on the relationship between social endowment insurance and household portfolio. The empirical results show that (1) the participation of social endowment insurance is positively related to the possibility of holding risky financial assets and the ratio of risky financial assets; (2) the effect of social endowment insurance is strong and significant in urban areas but weak and not significant in rural areas; (3) the moderating effect of financial literacy on the relationship between social endowment insurance and household portfolio widens the gap of the household portfolio between the urban and rural areas. This paper indicates that the social endowment insurance would affect the household portfolio decisions positively and the financial literacy positively moderates the relationship between social endowment insurance and household portfolio, which just can be applied to urban households. This paper provides evidence of the inequality between the urban and rural households in China and discusses the possible causes of the urban-rural income gap.

Does COVID-19 Reduces Income and Wealth Inequality: Evidence from OIC Countries

This study investigated the effect of the COVID-19 pandemic on income and wealth inequality in the 56 Organization of Islamic Cooperation (OIC) member countries from 2010-2021. We employ a panel fixed effect model to estimate the relationship between a dummy COVID-19 outbreak and a comprehensive inequality proxy consisting of income and wealth inequality of the top 10%, bottom 50%, and top 1%, respectively. Findings suggest that while COVID-19 has contributed to a reduction in wealth inequality, it has not had a significant effect on income inequality. The restriction policies imposed during the pandemic have decreased the proportion of high-wealth individuals, but not the proportion of high-income earners. To further promote income equality, governments should focus on increasing foreign investment by improving the ease of doing business and enhancing political stability in the region.

Does COVID-19 Reduces Income and Wealth Inequality: Evidence from OIC Countries

This study investigated the effect of the COVID-19 pandemic on income and wealth inequality in the 56 Organization of Islamic Cooperation (OIC) member countries from 2010-2021. We employ a panel fixed effect model to estimate the relationship between a dummy COVID-19 outbreak and a comprehensive inequality proxy consisting of income and wealth inequality of the top 10%, bottom 50%, and top 1%, respectively. Findings suggest that while COVID-19 has contributed to a reduction in wealth inequality, it has not had a significant effect on income inequality. The restriction policies imposed during the pandemic have decreased the proportion of high-wealth individuals, but not the proportion of high-income earners. To further promote income equality, governments should focus on increasing foreign investment by improving the ease of doing business and enhancing political stability in the region.

해외직접투자가 경제성장에 미치는 영향

Purpose – The purpose of this study is to shed new light on the impacts of FDI by multinational corporations on the economic growth of the host country. Design/Methodology/Approach – This study compares and analyzes the different impacts of existing FDI inflows and local added value creation of multinational corporations on the per capita national income of the host country. In addition, this study conducted a fixed-effects panel model analysis on a sample of 42 countries from 2005 to 2016 of the OECD's Analytical AMNE database. Findings – First, as a result of panel analysis of a fixed-effect model that controlled for the effects of individual countries and major macroeconomic and policy variables, the share of local value-added creation of subsidiaries of multinational corporations had a significant positive impact on the growth of per capita income in each country, but the share of FDI inflows did not have a statistically significant impact on the growth of per capita national income. Second, the results of analysis by dividing the sample into developed and developing countries also confirmed that the share of local value-added creation of subsidiaries of multinational corporations has a positive effect on economic growth in both developed and developing countries. In addition, the impact of FDI on economic growth is greater in developing countries than in developed countries. On the other hand, the share of FDI inflows had a positive effect on the economic growth of developing countries, but had no significant effect on the economic growth of developed countries. Research Implications – In identifying the relationship between FDI and national economic growth, it was confirmed that the use of the OECD's Analytical AMNE statistics is more appropriate than traditional FDI data.

Comparative Analysis on Liquidity and Risk-Taking Behaviour between Islamic and Conventional Banks in MENA Region

We compare the effect of liquidity on risk-taking between Islamic and conventional banks in the MENA region over the period 2005-2017. Using the fixed effect panel model with panel-corrected standard error, we found that funding liquidity in both Models significantly affects conventional banks' risk-taking behaviour, but the effect on the Islamic counterpart is insignificant. However, liquidity risk and bank activities represented by loans significantly affect Islamic bank risk-taking behaviour but show no significant effect on conventional banks. However, the effect varies with risk-taking proxies and the size of banks. This entails liquidity and bank risk-taking behaviour that differs with the type of banking system and the countries’ peculiarities. Thus, liquidity regulation should be implemented with the consideration of other region and their peculiarities.

Breaking with traditions? How parental separation affects adolescents’ gender ideologies in the UK

ABSTRACT It is often assumed that parental union dissolution leads to more egalitarian gender ideologies among children. Yet evidence on variations in gender ideologies by family structures is scant and based mostly on cross-sectional data. This study offers a closer examination of whether any effect of parental union dissolution can be explained by parents restructuring work and care responsibilities along more egalitarian lines after separation. Drawing on longitudinal data from the UK Millennium Cohort Study, this study applies fixed-effects panel models to estimate the effects of parental union dissolution on gender ideologies of 6,577 adolescents between ages 11 and 14. Parental separation is found to result in more egalitarian gender ideologies toward female employment among boys but not among girls. In line with the role restructuring argument, the positive effect of separation on egalitarianism is driven by boys, whose fathers had rarely had full responsibility for childcare before separation. By highlighting differential effects and possible mechanisms, the findings offer a more nuanced understanding of the implications of increasing deinstitutionalization of family relationships.