Two-way Fixed Effects Model Research Articles

Guangxi's Primary and Non-Primary Cities: Wage Gap, Human Capital Gap and Economic Gap

Based on the panel data of 14 cities in Guangxi(China) from 2004 to 2021, a two-way fixed effect model is established to analyze the effects of wage gap and human capital gap on the economic gap between non-primary and primary cities. The results found that both the wage gap and the human capital gap have a significant positive impact on the economic gap between cities in general; regional heterogeneity tests show that some cities have a significant impact on the economic gap in terms of the wage gap and the human capital gap, while others do not; there is a positive moderating effect of industrial structure upgrading on the relationship between wage gap and economic gap. Based on this, non-primary cities should pay attention to the synergy between economic development and wage income improvement; actively create good development opportunities and enhance the ability to attract talents; improve self-development ability through industrial upgrading and opening up to the outside world.

How does the Expansion of University Enrollment affect the return on investment in China's Real Economy

The implementation of college enrollment expansion (CEE) has a positive effect on China's human capital (HC) and is beneficial to the return on investment（ROI） in China's Real Economy (RE). This paper selects the sample data of 30 provinces (municipalities and autonomous regions) in China from 2013 to 2020, and uses the two-way fixed effect model to study the impact of CEE on the RE. The results show that there is an inverted U-shaped relationship (USR) between university enrollment expansion and the RE, indicating that when the university enrollment expansion policy reaches a certain scale, it will have a positive promoting effect on the RE. Secondly, the degree of influence of CEE on the development of RE in different regions of China is also different. Compared with the eastern regions (ER), the positive effect of CEE on the central and western regions (WR) is more obvious. Finally, the intermediary mechanism shows that CEE can improve the level of HC by training more research and development personnel, so as to achieve high-quality economic development (HQED).

How digital transformation helps enterprises achieve high-quality development? Empirical evidence from Chinese listed companies

PurposeThe purpose of this study is to explore how digital transformation helps enterprises achieve high-quality development, including the mediating mechanism of information transparency, innovation capacity and financial stability, the moderating role of financing constraints and government subsidies, and the heterogeneous effects of property rights, size and growth.Design/methodology/approachThis study conducts two-way fixed-effect model using 780 samples of China's Shanghai-Shenzhen A-share listed companies from 2012 to 2019.FindingsThe results show that digital transformation can effectively improve the total factor productivity (TFP) of enterprises through the triple channels of information transparency, innovation capability and financial stability. Meanwhile, financing constraints significantly inhibited the contribution of digital transformation to TFP, while government subsidies significantly increased the contribution of digital transformation to TFP. In addition, state-owned enterprises (SOEs), large enterprises and high-growth enterprises are more able to achieve high-quality development by increasing their digital transformation.Practical implicationsIn the process of implementing digital transformation, companies should actively improve information transparency, financial stability and innovation capabilities, and choose differentiated paths based on intrinsic characteristics such as property rights, scale and growth. At the same time, the government should actively improve not only the digital institutional environment but also the financial policy and credit system.Originality/valueThis study enriches the theoretical research framework of digital transformation and high-quality development by identifying the channel mechanisms and boundary conditions through which digital transformation affects high-quality development and expands the consequences of digital transformation and the antecedents of high-quality development.

Research on Ambidextrous Innovation and Regional Innovation Capability in Innovation Ecosystem from Institutional Perspective

According to the organizational ambidexterity theory, the mechanism of ambidextrous innovation on regional innovation capability in the innovation ecosystem is explored, institutional environment is introduced as a moderating variable, corresponding theoretical models are constructed, and empirical research is carried out by application of a two-way fixed effects model based on the panel data of 31 provinces in China from 2009 to 2018. The results show that there is a u-shaped relationship between exploratory innovation and regional innovation capability in innovation ecosystem, and exploitative innovation in innovation ecosystem has a significant positive impact on regional innovation capability. The complementarity of exploratory innovation and exploitative innovation in innovation ecosystem positively affects regional innovation capability. Furthermore, institutional environment strengthens the positive correlation between exploitative innovation and regional innovation capability. On the basis of the above conclusion, it is proposed that each innovation population should strengthen the exchange and sharing of technology and knowledge, carry out independent collaborative ambidextrous innovation, and the government should play a governance role in the innovation environment in order to promote the improvement of regional innovation capability.

Agri-Ecological Policy, Human Capital and Agricultural Green Technology Progress

Agri-ecological policy and human capital are important factors affecting agricultural green technology progress (AGTP), but the related research is relatively insufficient. This paper contributes to existing research through new insights on the effect of agri-ecological policy on AGTP, using human capital as a moderating variable. We use the Super-efficiency SBM-DEA model to measure AGTP in 30 provinces of China during 2000–2019, and use a two-way fixed effects model to analyze the nonlinear effect of agri-ecological policy on AGTP and the moderating role of human capital. The results show that there is a “U”-shaped relationship between agri-ecological policy and AGTP, where human capital plays a positive moderating role. Intermediate human capital and advanced human capital can significantly moderate the impact of agri-ecological policy on AGTP, while the moderating role of primary human capital is not significant. The “U”-shaped relationship between agri-ecological policy and AGTP involves some heterogeneity based on differences in grain function and the two sides of the Hu Huanyong line.

Trust and the educational gap in the demand for redistribution: Evidence from the World Values Survey and the European Value Study

Although previous studies have examined the influence of education on support for redistribution, studies on how this social cleavage of support for redistribution due to education varies depending on several conditions are scarce. To fill this gap, by focusing on the discussions of motivation with self-interest and with the perception of fairness, this study examines the moderation effects of social and institutional trust on the association between education and the demand for redistribution. For the analysis, the present study utilizes pooled data from multiple rounds of the World Values Survey and the European Values Study and two-way fixed-effects models. Through the international comparative analysis, this analysis finds that social trust but not institutional trust dampens the cleavage of support for redistribution due to education. These results suggest that the horizontal aspect of trust may be more influential on preferences for redistribution than the vertical aspect of trust.

Public Diplomacy and Chinese OFDI: Empirical Evidence from the Africa

<p>Public diplomacy is a significant factor in promoting policy communication, people-to-people bonds, and the protection of foreign assets between two nations, but there is little research on the economic worth of public diplomacy. Python was used to crawl the daily search frequency of "China", "African countries", and related terms to construct the heat index of China-Africa public diplomacy during 2011-2019, and a two-way fixed effect model was developed to examine the impact of public diplomacy on China’s outward foreign direct investment (OFDI) in Africa. The empirical results show that public diplomacy has a considerable favorable effect on China’s OFDI in Africa, and after a series of robustness tests, the basic conclusion still holds. Heterogeneity tests show the investment promotion effect of public diplomacy is more pronounced in sub-Saharan Africa and that the promotion mechanism exhibits the characteristics of poverty alleviation and risk aversion. In addition, the promotion effect of public diplomacy on China’s OFDI becomes greater as time goes on. In terms of impact mechanisms, public diplomacy may promote OFDI by enhancing financing capacity and improving national governance. The research conclusion has policy implications for promoting China-Africa public diplomacy and investment cooperation in the new era.</p>

Impact of digital infrastructure inputs on industrial carbon emission intensity: evidence from China's manufacturing panel data.

Digital infrastructure inputs (DIIs) are vital in strengthening the framework for developing the digital economy and encouraging economic growth. Nonetheless, the risks of environmental contamination are pervasively caused by the rapid expansion and utilization of digital infrastructure. Assessing the carbon emission intensity (CEI) and level of the DIIs of 18 manufacturing in China as the research subject, this study discusses the heterogeneous behavior of various input sources and industries. Furthermore, a two-way fixed effects model, threshold effects model, mediating effects model and moderated mediation effects model have been adopted to examine the nexus between DIIs and CEI of manufacturing. The results show that (1) DIIs raise China's manufacturing CEI and exert a non-linear threshold effect. (2) From the perspective of national attributes, the foreign DIIs will put more pressure on reducing the CEI in China. From the perspective of industry characteristics, DIIs are the most unfavorable for low-carbon development in capital-intensive industries. (3) Due to the mediating effect of total factor productivity (TFP), the positive influence of DIIs on CEI has dramatically diminished. (4) Participation in the global value chain (PAR) and foreign direct investment (FDI) exert moderating effects in the process of the direct effect and mediating effects. In light of the aforementioned conclusions, specific recommendations for developing digital infrastructure and reducing carbon emissions are proposed.

The trade-off between economic development and pandemic control: strategy identification and effect analysis

ABSTRACT The pandemic has substantially impacted global development. Countries worldwide have weighed economic development and pandemic control and gradually formed two entirely different governance strategies: the elimination strategy with the goal of zero new cases and the suppression strategy with the goal of ‘smoothing the pandemic curve’. Amid the popularity of vaccinations and mutation of the virus, how do countries implement changes in governance strategies? How effective is the response to the pandemic? This study constructed an indicator, based on economic and pandemic data from 34 countries, to identify each country’s strategy choice. The modified Slack-based Measure model and two-way fixed-effect model were used to assess pandemic governance efficiency and analyse the impact of the elimination strategy, respectively. The results show that most countries that adopted the elimination strategy earlier have changed to select the suppression strategy. Nevertheless, the elimination strategy has a significant positive effect on improving governance efficiency, especially under conditions of low vaccination, scarce medical resources, and export-oriented and non-democratic countries. However, this effect gradually weakens with viral mutation. The results also showed that the elimination strategy was more conducive to civil liberties in the earlier period. Therefore, in addition to popularising vaccinations, local conditions should be considered when selecting a strategy.

Effect of the logistics industry on the promotion of China's position in the global value chain: An international trade perspective

In an increasingly complex international environment and deepening economic globalisation, the logistics industry, as the basis of international trade circulation, has a far-reaching effect on promoting a country's position in the global value chain. Based on the perspective of international trade, this study presents a two-way fixed effects model using the 1995–2018 panel data of 59 economies. The empirical results show that the development of the logistics industry can significantly promote the status of a country's global value chain. National economic development level, human capital, technological innovation and application level, and logistics infrastructure level are the main channels through which this promotion effect takes place. Therefore, China should accelerate the construction of export logistics infrastructure and cross-border intelligent logistics systems, and enhance the customs clearance and logistics hub capacity of its ports. ‘Reinforcing’, ‘strengthening’, and ‘extending’ the chain as a means to optimise chain integration force will allow smooth circulation at home and abroad, high-quality development of the logistics industry, and greater opportunities. Ultimately, this will promote the status of the global value chain in the high-quality development stage of the national economy.

Digital Financial Inclusion, Land Transfer, and Agricultural Green Total Factor Productivity

Improving agricultural green total factor productivity is important for achieving high-quality economic development and the SDGs. Digital inclusive finance, which combines the advantages of digital technology and inclusive finance, represents a new scheme that can ease credit constraints and information ambiguity in agricultural production. First, this study focused on agro-ecological functions; we incorporated total agricultural carbon sequestration and emissions extraction into the evaluation system and used the mixed-direction-distance function to calculate agricultural green total factor productivity. Then, based on panel data from 31 provinces in China collected from 2011 to 2021, we used the two-way fixed effect model, the interactive fixed effect, and the plausibly exogenous variable method to test the impact of digital financial inclusion on agricultural green total factor productivity, and its mechanism of action. The panel-corrected standard error and fixed effect Driscoll–Kraay methods were used to account for the unobserved heterogeneity and cross-section dependence in the panel data. The results showed that digital financial inclusion can significantly improve agricultural green total factor productivity. This conclusion remained valid following robustness tests using the spatial econometric model and the method of changing explanatory variables. Digital financial inclusion can improve agricultural green total factor productivity by facilitating the transfer of agricultural land. Sound digital infrastructure and strict green credit policies enhance the role of digital inclusive finance in promoting the green development of agriculture. These conclusions could help the financial sector to formulate flexible, accurate, reasonable, and appropriate financial policies and products that would support agriculture, and enhance the role of digital inclusive finance in promoting sustainable agricultural development.

Gender equality and central bank independence

Central bank independence (CBI) is vital for maintaining stable economic expectations. Our work employs a panel of 161 economies during the period 1970–2019 to investigate the relationship between gender equality and CBI. By estimating a two-way fixed-effect model, we find that gender equality improvement promotes CBI. This baseline conclusion is confirmed to be robust to fungible indicators, cross-sectional dependence, and endogenous concern. One of these checks, which has a dynamic model specification, shows that CBI’s effect could last for more than three years. Moreover, a set of extended investigations reveals heterogeneity, whereby the positive effect of gender equality on CBI is more profound in economies where there is less political segmentation of the product market, more existing educational resources, and fewer restrictions on accessing information from freely-expressed media. Based on our findings, relevant suggestions are provided for global investors and development banks.

Disruptive Displacement: The Impacts of Industrial Robots on the Energy Industry’s International Division of Labor from a Technological Complexity View

In light of the growing economic uncertainties worldwide, the use of industrial robots has emerged as a significant opportunity for improving the production efficiency and the international division of labor in China’s energy industry. This study employed a two-way fixed-effect model utilizing data from 31 Chinese provinces between 2011 and 2019 to investigate the impact of industrial robots on the energy industry’s participation in the international division of labor. The results of the study indicated that the widespread application of industrial robots can boost the international division of labor status of China’s energy sector. This conclusion remains robust even after addressing the potential endogeneity issues and conducting a range of sensitivity tests. Furthermore, our findings suggest that the regions that possess abundant energy resources or exhibit a lower carbon intensity are more likely to leverage the use of industrial robots to increase the technological sophistication and enhance their participation in the international division of labor. The application of industrial robots in the energy industry can enhance the international division of labor through two distinct channels: optimizing the factor structure and reducing the export costs. Our findings have important policy implications for ensuring energy security and improving the energy industry’s participation in the international division of labor.

Chasing Green: The Synergistic Effect of Industrial Intelligence on Pollution Control and Carbon Reduction and Its Mechanisms

The coordinated promotion of pollution control and carbon reduction is intended to build a more beautiful China. Intelligent industrial technology plays an important role in the fight against climate change and in improving the ecological environment. Based on panel data from 30 provinces in China from 2006 to 2020, we used a two-way fixed effects model to evaluate the synergistic effects of industrial intelligent transformation on pollution control and carbon reduction and its mechanisms. The results showed that the introduction and installation of industrial robots by enterprises significantly reduced carbon emissions and the concentration of fine particles in the air, as well as having the synergistic effect of reducing pollution and carbon. This conclusion was still robust after using instrumental variable methods to perform endogenous tests. The study also showed that industrial intelligence reduced pollution and carbon through mechanisms that promoted green technological innovation and improved energy efficiency. The conclusions of this study could provide evidence for the use of digital technologies to promote environmental protection and achieve the goal of carbon neutrality, as well as play a significant role in the promotion of economic and societal green transformation.

Persistent Rise in Demand for Firewood in Bhutan? An Unbalanced Panel Data Analysis 2003-2017

Using the large sample household survey conducted in the years 2003, 2007, 2012, and 2017, this study examines the change in firewood consumption due to the adoption of electricity, liquid petroleum gas (LPG), and biogas. This study examines the use of firewood separately for cooking and heating purposes over the study period.Almost all the households in Bhutan are connected to electricity. The rural electrification programme in the last two decades has helped households shift to electricity for lighting and cooking purposes. While we look at the energy use dynamics in Bhutan, the households have shifted their energy use from firewood to more clean energy sources such as electricity, liquefied petroleum gas (LPG), and biogas for cooking purposes. However, the use of firewood for heating has been persistently increasing over the years. Our two-way fixed effect model suggests that firewood family size, the distance to the distribution point, and the number of cattle the households own also significantly influence firewood consumption.The results from the Focus Group Discussions (FDGs) indicated that the Bhutanese tradition of construction, food, and living in rural areas plays a significant role in maintaining the unwavering demand for firewood.

The Impact of Industrial Intelligence on Carbon Emissions: Evidence from the Three Largest Economies

Many studies are exploring the generated factors of carbon emissions to make a contribution to environmentally sustainable development as carbon emissions have increased by more than 5% in the past ten years. However, few investigations have considered the effects of industrial intelligence on carbon emissions. In order to discover whether the development of industrial robots will influence the environment, this paper employs the IFR data of industrial robots from 2006 to 2021 to investigate their impacts on carbon emissions in the three largest economies by using the classical linear regression model, OLS (Ordinary Least Squares), from the factors of robot installations and robot density, which are measured by ownership per thousand manufacturing people, respectively. The positive correlation coefficients of robot installation and density in the USA are 0.010 and 0.011; they are 0.185 and 0.204 in China; and 0.156 and 0.142 in Japan. To ensure the reliability of the results, we also do a robustness test and an endogeneity test by using the two-way fixed effect model, and they show the same results. The main findings of our study show that industrial intelligence can have significant positive impacts on carbon emissions in the three economies and this means that the application of industrial intelligence not only accelerates economic growth, but also causes the pressure on the environment. Moreover, the verification results also indicate that the impacts of industrial intelligence on carbon emissions are dominated by driving effects, and the higher the robot density, the stronger the driving effects on carbon emissions. Based on the findings, corresponding policy suggestions are proposed to guide governments in trimming their environment protection policies more efficiently.

Does seed industry innovation in developing countries contribute to sustainable development of grain green production? Evidence from China

China's seed industry innovation strategy is considered a key measure to guarantee grain green production. However, there has been no scholarly focus on the implementation process in different regional characteristics. This exploration has important reference to bridging the gap between seed innovation in developing and developed countries. In this study, we used the 2012–2021 provincial panel data in China, the two-way fixed effect model, instrumental variable method and least squares method were used to investigate the impact of seed industry innovation on the green total factor productivity of grain with different regional characteristics. The study results show that the seed industry innovation promotes green production of grain. When total factor productivity of grain is decomposed into green technical progress and green technical efficiency, seed industry innovation has a significant positive impact on both of them. This meant that seed industry innovation not only improved the efficiency of green food production but also led to the promotion of green food production technology. In addition, regional resource misallocation inhibited grain green production and acted as a negative moderator for seed industry innovation. In contrast, regional environmental regulation and absorptive capacity act as positive moderators. Finally, we analyzed the heterogeneity of grain functional areas and found that grain main production provinces and grain production and consumption balance provinces had similar conclusions. However, capital misallocation and absorptive capacity did not significantly moderate the impact of seed innovation on green total factor productivity of grain in the gain main consumption provinces.

Internet development and regional innovation efficiency: the moderating effect of intellectual property protection

ABSTRACT Promoting innovation is a critical route to high-quality economic development. The objective of this study is to analyse the impact of internet development (INT) on regional innovation efficiency (RIE). Using the super-Epsilon-based measure model under metafrontier (M-Super-EBM), the RIE is evaluated based on panel data of 284 Chinese cities from 2010 to 2018. On this basis, we adopt a two-way fixed effect model to examine the role of INT on RIE. Additionally, we further construct a moderating model to probe the effect of intellectual property protection (IPP) in the influencing mechanism of INT on RIE. The empirical results show that China’s RIE displayed an upward trend during 2010–2018. Cities in coastal provinces had the largest RIE. The development of the internet significantly improves China’s RIE, and the promotion effect is mainly achieved by increasing innovative input and output. The synergetic effect of INT and IPP on RIE is significantly positive. Moreover, a U-shaped relationship is also validated between IPP and RIE. The estimated results remain valid after a series of robust checks. Hence, it is of immense significance to accelerate the internet application and strengthen the IPP intensity for the improvement of innovation efficiency.

Criminal justice system contact of students with disabilities by race and ethnicity: Examining the role of school police

Schools are a common site of criminal justice system contact for students with disabilities (SWD), especially Black and multiracial SWD. The presence of police in schools may increase the frequency with which SWD are arrested or otherwise referred to law enforcement. This study examines the relationship between police in schools and (a) arrests and (b) referrals to law enforcement of SWD, including differences across racial/ethnic groups of SWD. It uses a difference-in-differences design drawing on two waves of data from the Civil Rights Data Collection (N = 88,479 schools). A series of two-way fixed effects models estimates the impact of either adding or removing police on the rates of arrest and referral to law enforcement of SWD. Results were mixed, with heterogeneity across both treatment-comparison conditions and racial/ethnic groups of SWD. The findings are interpreted through a lens of equity in how schools address student behavior.

Research on Finance Reducing the Cost of Real Businesses

In the context of financial development tending to be digital and technological, exploring the relationship between fintech and the cost of real enterprises is significant for the high-quality development of real enterprises. Using provincial panel data from 2011-2020, this study empirically investigates the impact, heterogeneity characteristics and transmission mechanism of fintech on the cost of real enterprises using a two-way fixed effects model. This study demonstrates that fintech significantly lowers the cost of real businesses; in terms of different regions, the impact of fintech development on the cost of real enterprises is more significant in eastern regions than in central and western regions; corporate gearing, innovation capacity, financing constraints and financial regulation are the moderating variables of fintech impact on the cost of real firms. Based on this, suggestions are made in this paper related to the high-quality development of fintech, this is an important study to promote the deep integration of fintech and real businesses and to promote high quality development of the real economy.