Two-way Fixed Effects Model Research Articles

The Impact of Digital Inclusive Finance on Agricultural Green Total Factor Productivity: A Study Based on China’s Provinces

Digital inclusive finance is key to China’s agriculture and low-carbon economics. The panel data for China’s 30 provinces were chosen from 2011 to 2019. An SBM GML model was applied in the thesis to measure agricultural green total factor productivity (GTFP), and to determine how Digital Inclusive Finance would affect agricultural GTFP a two-way fixed effect model was created. This study found that, from 2011 to 2019, the advancement of Digital Inclusive Finance could effectively enhance and drive the continuous increase of agricultural GTFP in China. Specifically, agricultural GTFP is increased by 0.288% as a result of every 1% rise in the Digital Inclusive Finance index; Digital Inclusive Finance helps agricultural green technologies advance and become more effective. According to a mechanism test, Digital Inclusive Finance increases agricultural GTFP growth by improving green technology innovation. Further analysis shows that the development of agricultural GTFP is significantly related to the depth and digitalization of Digital Inclusive Finance, but not in terms of its breadth. The above findings provide new ideas and empirical evidence for revealing the connection among Digital Inclusive Finance and agricultural GTFP and, on this basis, designing and improving relevant policies.

How does urbanization affect public health? New evidence from 175 countries worldwide.

Urbanization is an essential indicator of contemporary society and a necessary historic stage in the industrialization of all countries. Thus, we explore the impact of urbanization on public health using the OLS estimation and a two-way fixed effect model based on annual panel data from 175 countries from 2000 to 2018. This paper also addresses potential endogeneity issues and identifies causal relationships using the coefficient stability tests, system GMM, and instrumental variable method. The results demonstrate that urbanization positively affects public health. Furthermore, we find that the impact of urbanization on public health can be mediated through living standards, and nations with higher living standards reduce the effect of urbanization on public health. An increase in the urbanization rate can promote public health by improving residents' living standards. Our results have significant real-world implications for the research of urbanization and the formulation of public health policy.

Measurement and Influencing Factors of Carbon Emissions of China’s Livestock Husbandry in the Post-COVID-19 Era—Based on the Supply-Side Perspective

The strategy of “carbon peaking and carbon neutrality” and the COVID-19 pandemic have become dual challenges for the high-quality development of livestock husbandry. This paper takes the carbon emissions in China’s livestock husbandry as the research object and uses the Intergovernmental Panel on Climate Change (IPCC) Tier 2 coefficient to measure the total carbon emissions and carbon intensity of the industry in 2008–2019. Taking the above two elements as explained variables respectively and using the two-way fixed effects model (FE-TW) that controls time and space effects, this paper specifically examines the effects of various factors in the supply side of livestock husbandry on the explained variables, and further examines the role of technology structure and scale structure. According to our measurement, total carbon emissions showed an inverted U-shaped change and carbon intensity declines in an M-shaped curve during the study period. Both total carbon emissions and carbon intensity are composed mainly of CH4 that is primarily generated by grass-fed livestock industries with spatial distribution patterns of “hill” and “cliff”, respectively, while the spatial expression of these two factors is related to the distribution of grain areas. As the test on supply side factors shows, the carbon emissions of livestock husbandry are apparently affected by its land structure, breeding structure, technical level and scale level, but the impact of the level of human capital and mechanization is not as significant as that of technological structure and scale structure. Combining the empirical results and the special background of the COVID-19 pandemic, this paper aims to provide more targeted suggestions for livestock husbandry development and carbon reduction during the COVID-19 pandemic period. It also aims to offer a reference for the promotion of green and high-quality development of livestock husbandry and the completion of the task of “carbon peaking and carbon neutrality”. This study will help policy makers to clarify the goal of reducing carbon emissions in animal husbandry and optimize and improve the corresponding industrial and technological policies.

Impact of Digital Economy on Energy Supply Chain Efficiency: Evidence from Chinese Energy Enterprises

The global industrial chain and energy supply chain are being reconfigured at an accelerated pace, and the uncertainty of China’s energy supply security is growing significantly. Empowering energy supply chains through the digital economy (diec) has a positive effect on accelerating the transformation of China’s energy supply structure. This paper discusses the effect and mechanisms of the digital economy on energy supply chain efficiency (esce). Specifically, based on the panel data of 112 energy enterprises in China from 2011 to 2019, energy supply chain efficiency and digital economy at the enterprise level were evaluated through three-stage DEA and content analysis, respectively. A two-way fixed effects model and mediation effect mode were adopted to investigate the nexus of diec and esce. The results show that the digital economy improves energy supply chain efficiency, and the conclusion holds water even after a series of robustness tests and endogenous treatment. Meanwhile, its promotion effect is more significant among large enterprises, non-state enterprises and enterprises in high market-oriented regions. The main impact mechanisms are regional industrial agglomeration and technological innovation of enterprises. Based on the above conclusions, it is suggested to take advantage of the industrial aggregation effect and technological innovation effect of the digital economy to further improve the efficiency of the energy supply chain for the purpose of maintaining energy supply security.

Coordinated Development Strategy of the Beijing-Tianjin-Hebei Region and Regional Economic Convergence

This paper selected panel data of Beijing-Tianjin-Hebei and other eastern regions except Beijing- Tianjin-Hebei from 1999 to 2018. The economic convergence model, double difference method and twoway fixed effect model are used to study the influence of Beijing-Tianjin-Hebei coordinated development strategy on regional economic convergence. It is found that (1) the Beijing-Tianjin-Hebei coordinated development strategy has a negative effect on the economic growth of Beijing-Tianjin-Hebei as a whole, Tianjin city and Hebei province, the positive effect on Beijing is gradually significant, and the intra-regional economy shows a fluctuating dispersion trend; (2) the economic gap between Tianjin and Hebei Province and the rest of the east, as well as between the rest of the east and Beijing, has narrowed. The economy of the eastern region as a whole shows convergence, but the speed of convergence is relatively slow; (3) the Beijing-Tianjin-Hebei coordinated development strategy strengthens the role of human capital in driving regional economic growth, while the effect on the economic growth of other factors is insignificant or negative. Therefore, the policy dividend needs to be further stimulated.

Spatial Effects of Digital Economy and Foreign Direct Investment—A U-shaped relationship

Is the development of digital economy necessarily beneficial to foreign direct investment (FDI)? Based on panel data of Chinese prefecture-level cities from 2011-2019, the article empirically tests the spatial spillover effects between the digital economy and FDI using a two-way fixed effects model. The results show that FDI inflows between cities have significant spatial correlation, and a city's digital economy development level has an inverted U-shaped relationship with its geographic and economic proximity to urban FDI inflows.

The Impact of Environmental Protection Investment on Provincial Carbon Emissions in China: Empirical Analysis Based on Two-way Fixed Effects Model

In confront of global climate change, promoting carbon emission reduction and sustainable development has come to be acknowledged internationally. On the basis of panel data from 30 Chinese provinces from 2009 to 2020, this paper undertakes an empirical investigation into the connection between carbon emission intensity and investment in environmental protection. The findings demonstrate that investment in environmental protection has a nonlinear inverted U-shaped relationship with carbon emission intensity, that is, with the increase of environmental protection investment, its effect on carbon emission has changed from promoting to inhibiting. And the influence degree varied in different regions, with the influence in western and central regions being significantly stronger than that in eastern regions. The government should take full account of local conditions and formulate policies of environmental protection investment in accordance with local conditions.

The Impact of Social Security on Fertility Willingness in OECD Countries

The low fertility rate is a common problem faced by all countries in the world today. All countries in the world have adopted different policies to improve the fertility rate. Based on the panel data of 36 OECD member countries from 1995 to 2019, this paper studies the impact of social security level on fertility through a two-way fixed effect model, and also examines the impact of other influencing factors on fertility. The results show that there is a U-shaped relationship between social security expenditure and fertility rate, and the social security coverage rate and fertility rate have a negative relationship, and the impact effect is more indirect. The research results of this paper are helpful to understand the impact mechanism of fertility rate from a macro perspective, and provide reference for the Chinese government to improve fertility rate through multiple channels.

Digital inclusive finance and enterprise innovation—Empirical evidence from Chinese listed companies

The development of Digital Inclusive Finance (DIF) offers new opportunities for corporate innovation. This study empirically explores the influence of DIF on firms’ R&D and innovation output via a two-way fixed-effects model and an instrumental variable method using the 2011–2018 Peking University Digital Financial Inclusive Index to match city-level data of A-share listed companies. The results show that DIF plays a positive role in boosting company R&D innovation. Among the three DIF sub-dimensions, DIF coverage is the most significant in promoting R&D innovation. The role of DIF in promoting corporate R&D and innovation is most prominent for private enterprises, small and medium-sized enterprises, secondary and tertiary industries, and high-growth enterprises. In addition, DIF helps foster enterprise R&D innovation and can gratify the desire for innovation felt by adventurous business owners. Further analysis reveals that internal financing constraints and external banking competition have intermediary effects on the promotion of enterprise innovation, which are observed for the three sub-dimensions of DIF. The results of an instrumental variable regression and other robustness tests confirm the main findings.

Does Heterogeneous CSR Affect Corporate Performance?

The market rivalry and China’s ongoing economic expansion are both contributing to a gradual rise in shareholder influence over businesses. Fulfilling corporate social responsibility (CSR) is becoming more and more important to improve corporate performance, gain long-term competitive advantage and achieve sustainable development. Based on panel data of 514 listed Chinese A-share companies from 2015-2019, this study applies a two-way fixed effect model to examine the effect of CSR on corporate performance from stakeholders’ perspectives. And it also examines the mediating effect played by green technological innovation and the moderating effect of two basic corporate competitive strategies on the role of CSR in corporate performance. The study’s findings indicate that: (1) the fulfillment of CSR has a significant positive impact on corporate performance. (2) Green technology innovation plays a part in mediating the process of fulfilling CSR in promoting corporate performance. Internal CSR fulfillment enhances corporate performance by boosting investment in green technology innovation, but external CSR fulfillment enhances corporate performance by decreasing investment in green technology innovation. (3) The positive effect of CSR on corporate performance is weakened by an increase in the level of low-cost strategies, while the positive relationship between CSR and corporate performance is strengthened by an increase in the level of differentiation strategies.

The Impact of China’s OFDI on Inclusive Growth across Countries

Since the twentry-first century, deepening globalization has not only promoted the prosperity of international trade and investment and has led to many global crises. Faced with the looming threats, the Asian Development Bank first proposed the concept of “Inclusive Growth”, aiming to foster more inclusive and beneficial economic growth and reduce income disparity. As a substantial, lasting international investment, often with specific strategic purposes, FDI, especially China’s OFDI, includes not only capital investment but the provision of management, technology, and equipment, thus will affect the host countries’ pattern of economic activities and further have the consequent impact on the economy, society, and environment of the host countries. This paper uses a panel two-way fixed effects model to explore whether China’s OFDI promotes inclusive growth in host countries. It shows that China’s OFDI significantly promotes inclusive growth in host countries, and the instrumental variable method results support the findings’ robustness. Further, the heterogeneity analysis shows that the effect of China’s OFDI is mainly concentrated on coastal countries, members of the OECD, and high-income economies. This study is important for a deeper understanding of the impact of China’s OFDI on host countries’ inclusive growth worldwide.

Research on the Relationship between the Gathering of Scientific and Technological Talents and the High-Quality Development of Regional Economy—Taking Henan Province as an Example

Promoting China's economy from high-speed growth to high-quality development is an important judgment made by the 19th National Congress of the Communist Organization of China on China's economic development. Based on the panel data of 14 regions and cities in Henan Province from 2010 to 2017, this paper first calculates that the quality of economic growth in each province has spatial autocorrelation, and then uses a two-way fixed effect model to empirically test the quality of economic growth by gathering scientific and technological talents. The research results show that there is a significant positive correlation between scientific and technological talents gathering and the quality of economic growth in each city, And the level of regional economic development is the core factor affecting talent flow; Based on this, this paper puts forward relevant policy recommendations to promote the rational and orderly flow of scientific and technological talents and improve the quality of economic growth in various provinces.

How does Environment, Social and Governance Affect the Financial Performance of Enterprises?

Under the background of China’s economic structural transformation, the green and low-carbon economic development model draws the attention of politicians and academics. The low-carbon strategy provides a supportive political environment for the rapid development of ESG. However, research on the effect of ESG on enterprise financial performance is still insufficient. Using the data of A-share listed companies from 2011 to 2020, this paper examines the impact of ESG on corporate financial performance from the perspectives of ESG rating release and ESG level through Differences-in-Differences (DID) model and panel two-way fixed-effect model. Results show that the release of ESG indicators and the improvement of ESG level can significantly increase the enterprise financial performance. The role of ESG disclosure and level in promoting the enterprise financial performance is more significant in companies with less than 3 years of listing time and no Big Four audits. Furthermore, government intervention can inhibit the boosting effect of ESG on enterprise financial performance, while increased internet and marketization levels can reinforce that effect.

The Impact of ESG Rating on Stock Price Synchronization of Listed Companies: Evidence from China

To explore the latest feedback from the Chinese capital market on listed companies’ ESG evaluation, we construct a two-way fixed-effects model with a sample of Chinese A-share listed companies from 2018-2020 to empirically investigate the relationship between ESG rating and share price synchronization, and the impact mechanism is also explored from both internal and external perspectives of financial constraints and analyst attention. It is found that, a high ESG rating helps reduce the stock price synchronization, while financial constraints play a partial mediating effect and analyst attention plays a full mediating effect. In addition, the effect is more pronounced among manufacturing firms and non-SOEs. This study enriches the research related to ESG and stock price informativeness, and the findings provide important basis for the long-term benign development of ESG philosophy.

A Study on the Impact of Dynamic Visitor Demand on the Digital Transformation of Enterprises—Considerations Based on the Regional Innovation Environment and the Level of Big Data

To explore the impact of dynamic changes in tourist demand on the digital transformation of tourism enterprises, this paper starts with demand-side changes, environmental influences, and technical support, based on theories of supply and demand equilibrium, regional innovation environment, technology gaps, and comparative advantage, and conducts a multiple regression analysis using a two-way fixed effects model on data from China’s Shanghai, Shenzhen and New Third Board-listed tourism companies, as well as 31 provincial administrative regions. The study found that dynamic changes in tourist demand significantly impacted the digital transformation of tourism enterprises. In addition, the regional innovation environment and the level of big data also contributed positively to the relationship between tourist demand and the digital transformation of enterprises. For regions with different tourism resource endowments, there is heterogeneity in the impact of dynamic changes in tourist demand on the digital transformation of enterprises. Finally, recommendations for practitioners regarding the digital transformation of enterprises are provided based on this. We suggest that enterprises should pay attention to the changing needs of travelers. They should also consider the regional innovation environment and the level of big data as key resources to facilitate transformation. This will help accelerate digital transformation in tourism.

Energy saving and emission reduction effects of urban digital economy: technology dividends or structural dividends?

As a new economic form, the digital economy provides new opportunities to save energy and reduce emissions, but it may also become a booster for increasing energy consumption and pollutant emissions, making the sustainable development of cities face serious challenges. It is controversial whether the digital economy contributes to energy saving and emission reduction, and it is unclear what role technological progress and structural transformation play in the relationship between the digital economy and energy saving and emission reduction. In this study, the energy saving and emission reduction effects of the digital economy in cities and its mechanisms are empirically examined from the perspective of technological progress and structural transformation using the two-way fixed effect model and the mediating effect model. The results show that the digital economy increases urban energy consumption and reduces pollution emissions. The energy saving and emission reduction effects of the digital economy are more significant in northeastern cities, large cities, and resource-based cities. The mechanism test shows that the digital economy promotes urban energy saving and emission reduction through green technological progress, mainly because the energy saving from green technological efficiency improvements exceeds the energy rebound from green technological innovation. However, the digital economy has not shown energy saving and emission reduction effects by promoting industrial structural transformation. Specifically, the structural transformation of the secondary industry contributes to urban emission reduction, while the structural transformation of the primary and tertiary industries leads to efficiency loss of energy saving and emission reduction. Our findings provide valuable insights into the synergistic governance of "energy saving" and "emissions reduction" in cities in the digital economy.

Strategic responses to the pandemic: a case study of the US department store industry

PurposeThe study focuses on (1) the success of three strategies employed during the pandemic – two “persevering” strategies, curbside pickup and return window extension and one innovative strategy, virtual try-on technology and (2) whether the strategies are likely to be successful in the post-pandemic world.Design/methodology/approachThe authors utilize a panel dataset containing 17 department store chains in the US The panel includes weekly sales by the retailers at the city level from 2018 to 2021, encompassing both a pre-COVID-19 period and a period during the pandemic. A two-way fixed effects model, including retailer-city fixed effects and year-week fixed effects, is used to estimate department store sales.FindingsThe authors find that the two persevering strategies offset the negative impact of government-imposed containment and health measures on sales performance. On the other hand, the innovative strategy is more effective with a low level of containment and health measures, leading to our observation that virtual try-on may be more sustainable than the other two strategies in a post-pandemic environment.Originality/valueThis paper makes the following contributions: First, the authors contribute to the literature on strategies that may be used to respond to crises. Second, the authors contribute to the retail management literature, assessing the impact of the three retail strategies on department store sales. Finally, the authors compare the impact on sales of the two persevering strategies to the innovative strategy and conclude that a mix of these types of strategies may be most effective at generating short-term sales during a crisis and longer-term sales post crisis.

Equity Incentive Model, Source of Subject Matter and Enterprise Performance: Modification Effect Based on Equity Incentive Intensity

For modern enterprises, equity incentive is an important means to solve the principal-agent problem, the choice of incentive mode and the source of the incentive is an inevitable issue in the implementation of an equity incentive scheme. Based on the sample data of A-share listed companies from 2010 to 2020, this paper constructs a panel two-way fixed effect model, combining regression analysis and three interactions with differential equations (PDE), which empirically explores the relationship between two incentive models of stock option and restricted stock, the source of subject matter and enterprise performance. The study shows that the restricted stock incentive model significantly improved the performance of enterprises, and the intensity of incentives played a significant inverted U-shaped moderating role between the enterprise’s performance and the different incentive models. After adding the subject matter incentive source, it is further found that repurchase, as the source of subject matter, has a positive moderating effect on restricted stock and a negative moderating effect on stock option. The intensity of equity incentives moderates the relationship between stock option incentive models and enterprise performance when enterprises use repurchases as the source. The results of the above-given research provide some reference for enterprises to give appropriate incentive intensities, objective selection of the subject matter source under different equity incentive models based on their characteristics, and facilitation of more efficient use of equity incentive tools.

Impact of two-child policy on female employment and corporate performance: Empirical evidence from Chinese listed companies from 2010 to 2020

In 2013, the ‘Decision of the Central Committee of the Communist Party of China on Some Major Issues Concerning Comprehensively Deepening the Reform’ initiated the ‘selective two-child policy’, which allowed married couples to have two children if one of the parents was a single child. In the Fifth Plenary Session of the 18th Central Committee of the Communist Party of China in 2015, a decision was made to implement the policy that a couple can have two children; in 2016, the universal two-child policy was fully implemented. This study used female employment data disclosed by Chinese listed companies from 2010 to 2020, constructed a two-way fixed-effect model of time and industry, and empirically tested the impact of the two-child policy on female employment and corporate performance. The empirical test revealed that the higher the proportion of employed female workers, the better the firm’s performance. Expanding the scope of the two-child policy exhibited no reduction in the proportion of female employment, but weakened the positive effect of hiring female employees on corporate performance. Specifically, we found that firms with higher rates of female employment exhibit lower costs, and this low-cost effect disappears with the expansion of the scope of the second-child policy. This indicates that the economic benefits of female employment for firms result from wage discrimination. This study provides a theoretical and practical basis for safeguarding women’s reproductive and fair employment rights and promoting sustainable social development.

Study on the Impact of Environmental Tax on Industrial Green Transformation

Tax revenue is one of the essential means through which the government controls the macro-economy and plays a vital role in promoting environmental protection and sustainable development. This study takes Chinese panel data from 2004 to 2020 as sample observations, uses the SBM-GML index method to measure industrial green total factor productivity, and then uses econometric methods such as the two-way fixed effects model and instrumental variable method to analyze the impact of an environmental tax on industrial green transformation. It is found that the generalized environmental tax represented by vehicle and vessel tax, resource tax, and urban land use tax has a significant positive effect on industrial green transformation. After a series of robustness tests and the exclusion of endogeneity, this conclusion remains valid. The research shows that credit governance, the agglomeration of producer service, and their co-agglomeration with manufacturing are important adjustment mechanisms. Among them, credit management is special and compulsory, greatly restricting the environmental pollution behavior of industrial enterprises, and encourages enterprises to make green investments and to actively improve production processes.