Two-way Fixed Effects Model Research Articles

Research on the Impact of Digital Service Trade Barriers on Domestic Manufacturing Productivity

This article selects the data of 210 listed companies in Shanghai and Shenzhen A-shares from 2014 to 2019, measures the digital service trade barriers and productivity growth of electronic information manufacturing enterprises, and uses a two-way fixed effect model to analyze the impact of digital service trade barriers on electronic information manufacturing enterprises. Its impact on productivity and mechanisms, and provide policy recommendations. The research results show that: (1) Digital service trade barriers for electronic information manufacturing enterprises are generally on an upward trend. (2) Digital service trade barriers for electronic information manufacturing enterprises have a significant inhibitory effect on their productivity.

Does fintech influence sustainable development under natural resource constraints: insights from 270 Chinese cities

FinTech emerges as an instrument in a rapidly evolving world, offering innovative solutions to mitigate natural resource constraints, and thus achieve sustainable development. However, its influence remains unclear. To clarify this effect, this study aims to explore the sustainable development effect of FinTech In the context of natural resource constraints. Firstly, this paper empirically examines the sustainable development effect of FinTech using a two-way fixed effects model based on data from 270 Chinese cities from 2006 to 2021. Secondly, this paper delves into the moderating mechanism behind the sustainable development effect of FinTech by assessing the level of marketization and the progress of green technology. It reports three key findings: (1) FinTech significantly impacts sustainable development, following a distinctive U-shaped pattern, thus contributing to alleviating resource constraints. (2) Heterogeneity analyses show that this U-shaped relationship is more pronounced in the central and western regions, as well as in regions with a higher degree of development in the level of fintech. (3) Marketization and green technology influence the U-shaped relationship between FinTech and sustainable development, shifting it upward and to the left. These findings recommend practical policy suggestions for local government.

Working from home is here to stay, but how does it affect workplace learning?

This paper analyses how working from home affects workplace learning in terms of theoretical and practical knowledge during COVID19. We employ panel data gathered in monthly surveys of respondents in training companies between October 2020 and March 2022 to investigate this question. Apprentices in Switzerland are our case study. We address potential endogeneity concerns in two ways. First, we exploit variation across survey respondents and time in two-way fixed effects models. Second, we pursue an instrumental variable “shift-share”-type approach that leverages how occupations react to exogenous changes in working from home regulations. The results suggest that working from home has a significantly negative impact on practical knowledge but not theoretical knowledge, relative to frequenting the workplace. We do not find significant heterogeneity across company size. Similarly, our results do not vary significantly between occupations in which working from home is relatively more or less prevalent. Our findings remain robust to a wide range of robustness checks. Our evidence-based recommendations aim to preserve the acquisition of knowledge through workplace training.

Education helps to achieve shared prosperity: evidence from China

The realisation of the common wealth of all people has become the theme of the new era, and how to promote the process of realising common wealth in a solid and effective manner has become an important issue that needs to be resolved urgently. Combined with the essential connotation of common wealth, it is believed that education plays an important role in improving the quality of nationals to promote the common wealth in a solid manner. Therefore, this paper focuses on the realisation path of education for common prosperity. In order to explore this issue, this paper has constructed the index of education development level and the coefficient of common wealth, which characterise the independent variable and the dependent variable respectively. At the same time, it empirically analyses the mechanism of education development level on common prosperity by using two-way fixed effect model. It is found that, firstly, from 2012 to 2020, the coefficient of common wealth in China shows an increasing trend, and it is higher in the eastern region than in other regions, and lowest in the western region; secondly, educational inequality hinders common wealth to a certain extent; thirdly, the average years of education of China’s current employed population is low, which may have a negative impact on the common wealth; and fourthly, improving the level of education can significantly contribute to the realisation of common wealth.

Negative Media Coverage and Corporate ESG Performance: Evidence from China

Using Chinese A-share listed companies from 2011 to 2020 as a research sample, this paper examines the relationship between negative media coverage and corporate ESG performance using a two-way fixed-effects model. It is found that, first, negative media coverage can effectively promote corporate ESG performance. Second, the mediation mechanism study shows that negative media coverage positively promotes corporate ESG performance by increasing the degree of corporate financing constraints and information asymmetry and prompting corporations to change their ESG governance level. Third, the results of the heterogeneity test find that the positive relationship between negative media coverage and corporate ESG performance is more pronounced among firms without executives with overseas backgrounds, and the positive relationship between the two is more significant after the promulgation of China’s Code of Governance for Listed Companies in 2018. Fourth, further discussion revealed that negative media coverage has the strongest promotion effect on the performance of corporate environmental governance, followed by social governance performance, and lastly, corporate governance performance. The research in this paper contributes to an in-depth understanding of the impact of negative media coverage on corporate ESG performance and provides empirical evidence to facilitate policy formulation related to the role of media monitoring and to fully utilize the media’s role in corporate ESG governance.

Bank market structure and firm innovation-evidence from China.

This study explores the impact of bank market structure on firm innovation in China using a two-way fixed effects model. Our analysis is based on a dataset comprising 2,412,316 firm-city level observations. Our findings suggest that there exists a U-shaped relationship between bank market structure and firm innovation in China. Specifically, we identify that the financing channel is a crucial pathway through which bank market structure influences firm innovation. Moreover, our results indicate that this relationship is mainly driven by small firms and innovative firms, and is more pronounced in regions with stronger intellectual property rights protection or greater openness to foreign markets. In sum, this study contributes to the existing literature by advancing our understanding of the impact of bank market structure on innovation in Chinese firms.

The power of attention: Government climate-risk attention and agricultural-land carbon emissions

Climate change is a common challenge faced by all humanity. Promoting emission and carbon reduction in agricultural land is the most important priority for addressing climate change and realizing sustainable development. Based on data from 296 prefecture-level cities in China from 2011 to 2021, this study utilizes machine-learning and text-analysis methods to construct an indicator of government climate-risk attention (GCRA). It combines a two-way fixed-effects model to investigate how GCRA affects agricultural-land carbon emissions (ALCE) and carbon intensity (ALCI) and the mechanism of the impact. The results indicate that (1) GCRA substantially reduces ALCE and ALCI, and the conclusions are robust to a battery of tests. Furthermore, (2) mechanism analysis reveals that GCRA primarily uses three mechanisms—strengthening environmental regulation, promoting agricultural green-technology innovation, and upgrading agricultural-land mechanization—to reduce ALCE and lower ALCI. Additionally, (3) heterogeneity analysis suggests that the carbon-emission reduction effect of GCRA is more significant in the east, in arid and humid climate zones, and in non-grain-producing regions. Finally, (4) spatial-spillover effect analysis and quantile regression results demonstrate that GCRA also significantly inhibits carbon emissions and the carbon intensity of nearby agricultural land, with the inhibition effect becoming more pronounced at higher levels of government attention. This study's discoveries are helpful in promoting the emission reduction and carbon sequestration of agricultural land and provide references for developing countries to cope with climate change.

CLIMATE CHANGE AND HOUSEHOLD ELECTRICITY CONSUMPTION INEQUALITY IN CHINA

Based on the micro-data of China’s Urban Household Survey, this paper investigates the impact of climate change on household electricity consumption inequality by using a two-way fixed effect model. The result reveals that households are more likely to purchase air conditioning (AC) and consume more electricity in response to extreme weather shocks. Furthermore, it is observed that high-income households are better equipped to mitigate the negative effects of extreme weather, as they possess a larger proportion of AC units and are more likely to acquire new ones to cope with extremely high temperatures. Finally, the study finds that extreme weather shocks exacerbate inequality in household electricity consumption.

Evaluation of innovation primacy in cross-regional central cities: Evidence from the Huaihai Economic Zone in China (2010-2020).

With the intensification of global economic competition, innovation has become one of the core elements of vigorous development in various regions. Improving the innovation ability of cross-regional central cities is the main factor influencing whether a region can achieve economic and social development. In this paper, an innovation primacy index system is designed according to the links of the innovation value chain, and the innovation advantages and empirical effects are comprehensively analyzed by using the point-to-point method, entropy weight method, gravity model and two-way fixed effect model. Based on the data of 8 cities in the core area of the Huaihai Economic Zone from 2010 to 2020 in China, Xuzhou's innovation primacy ranks first in the core area of the Huaihai Economic Zone, which accords with its status as the central city of the region. Its index has been rising, and its development trend is also good. However, the overall innovation ability of the core area of the Huaihai Economic Zone is unbalanced; the overall economic foundation is not solid enough. In terms of knowledge innovation, R&D innovation and industrial innovation, the industrialization level, around the activation of Xuzhou city vitality, enhances the Xuzhou innovation radiation drive, leading to a decrease in the Huaihai Economic Zone. Finally, some corresponding suggestions on innovation primacy have been proposed for the city of the Huaihai Economic Zone.

The impact of digital financial inclusion on China's energy consumption: does economic decentralization matter?

Based on China's provincial panel data from 2011 to 2020, this paper empirically analyzes the impact of digital financial inclusion(DFI) on regional energy consumption(ECI) using two-way fixed effects model, panel threshold effects model and instrumental variables regression. The results show that, firstly, DFI`s development has an obvious inhibitory effect on the intensity of regional energy consumption. Meanwhile, the heterogeneity analysis finds that there are obvious regional differences, differences in the degree of financial agglomeration and differences in their own dimensions in the inhibitory effect of DFI on regional energy consumption. Specifically, the energy-saving effect of digital finance is more obvious in the western region of China, in regions with a lower degree of financial agglomeration, and the strongest inhibitory effect is the breadth of digital inclusion coverage. In addition, the threshold effect analysis shows that the energy-saving effect of DFI not only increases with DFI`s development, but also exists in a non-linear pattern of significant "marginal increment" as the degree of economic decentralization increases. To this end, China should make greater efforts to develop DFI and optimize its industrial structure; formulate differentiated development policies that take into account the resource endowment, industrial structure and technological level of each region; and improve its macroeconomic governance system by taking into account the level of DFI`s development in the region, as well as the power of financial decision-making and financial management..

Does Fintech Investment in Commercial Banks Improve Business Performance? -- Based on the Empirical Test of 42 Listed Commercial Banks in China from 2010 to 2022

Does Fintech Investment in Commercial Banks Improve Business Performance? -- Based on the Empirical Test of 42 Listed Commercial Banks in China from 2010 to 2022

Research on the impact of Digital Economy Development on The Integration of The Two Industries

Based on data from 2010 to 2021 in 30 provinces of China, comprehensive evaluation systems for digital economy development, manufacturing, and service industry integration were constructed. Using a two-way fixed effects model with individual and time dimensions, empirical analysis conducted the impact of digital economy development on the integration of the two industries in each province. Additionally, a panel threshold model was employed to analyze the nonlinear relationship between digital economy development and the integration of the industries. The research findings indicate a significant promoting effect of digital economy development on the integration of the two industries. Robustness tests confirm the stability of the empirical results. In terms of heterogeneity, digital economy development in various regions significantly promotes the integration of the two industries, with the promotion effect in the central and western regions surpassing that in the eastern regions, and the optimal effect in regions with a moderate level of industrialization. Nonlinear reveals the evident nonlinear characteristics of the impact of digital economy on the integration of the two industries, with different effects at different stages of digital economy development. Based on these findings, policy recommendations are proposed, emphasizing the vigorous promotion of digital economy support for the integration of the two industries and the cultivation of digital talent.

Do presidents favor co-partisan mayors in the allocation of federal grants?

Do presidents favor co-partisan mayors in the allocation of federal grants?

Research on the impact of environmental regulations on green technological innovation in China from the perspective of digital transformation: a threshold model approach

The digital transformation in developing countries is crucial in determining whether environmental regulations can better facilitate green technological innovation. This paper constructs a theoretical model to deduce the relationships among digital transformation, environmental regulations, and green technological innovation. Empirical research is conducted using a two-way fixed-effects model and a threshold regression approach, based on provincial panel data from China spanning the years 2013 to 2020. The results indicate that environmental regulation inhibits green technological innovation. However, digital transformation, by reducing cost pathways, can promote the efficiency of green technological innovation under environmental regulation. This moderating effect exhibits a nonlinear threshold characteristic. Regarding dimensions of digital transformation, the level of digital investment shows no threshold, while both the level of digital application and the scale of digital integration exhibit threshold effects. Presently, in China, digital transformation effectively incentivizes green technological innovation under environmental regulation. Therefore, increasing digital investment, advancing digital applications, and fostering digital integration are inevitable choices to drive green technological innovation under the pressure of environmental regulation.

Fiscal agricultural expenditures' impact on sustainable agricultural economic development: Dynamic marginal effects and impact mechanism.

Sustainable agricultural economic development is the core task for achieving the objective of rural revitalization strategy in China, which cannot be separated from the support and guidance of fiscal policy, and agricultural industry integration is a key path for the fiscal promotion of sustainable agricultural economic development. This paper systematically examines the interaction mechanism between fiscal agricultural expenditures and sustainable agricultural economic development by using 31 provincial panel data in China from 2008 to 2020 and adopting a two-way fixed effect model, a panel quantile model, and a mediating effect model, respectively. The results show that the impact of fiscal agricultural expenditures on sustainable agricultural economic development is significantly positive, and appears a dynamic increasing trend with the agricultural development stage upgrading. Moreover, heterogeneity analysis shows that the effect of fiscal agricultural expenditures is more obvious for the samples in the central region and with a high share of primary industry. Further, a mediating effect test finds that agricultural industry integration plays a mediating mechanism between fiscal agricultural expenditures and sustainable agricultural economic development. Therefore, this paper proposes constructing a long-term investment mechanism for fiscal agricultural expenditures, formulating differentiated fiscal support policies for agriculture, and prioritizing support for agricultural industry integration, which provides theoretical support and policy inspiration for promoting sustainable agricultural economic development.

Measurement of Agricultural Eco-Efficiency and Analysis of Its Influencing Factors: Insights from 44 Agricultural Counties in Liaoning Province

Agricultural eco-efficiency (AEE) considers economic and environmental benefits and is a key indicator of green agricultural development. To achieve the multiple goals of improving agricultural production efficiency, reducing agricultural environmental damage, and reducing the input of agricultural resources, this study enriches the case study of agricultural production performance evaluation at the county level by measuring the AEE of 44 agricultural counties in Liaoning Province based on panel data and a super-efficient slacks-based measure model including undesired outputs. A two-way fixed-effects model was used to analyze the impact of agricultural development, macro-environment, and policy support on AEE. We found that the average AEE of the counties in Liaoning Province in 2014, 2016, 2018, and 2020 was 0.716, 0.735, 0.749, and 0.813, respectively, indicating a cumulative improvement rate of 13.55%. The average AEE levels gradually improved during the study period. Notably, the development of AEE among the counties was uneven. AEE was distributed in a “block-like” manner, and its local correlation presents a phenomenon of “small agglomeration and large dispersion”. In addition, the level of the agricultural economy, industrialization, and urbanization significantly promoted the improvement of AEE, and the promoting effects varied between different income levels and regions. Therefore, Liaoning Province needs to improve the AEE of each county according to local conditions and narrow the differences in AEE between counties. To continuously improve the level of rural economic development, lead the development of agricultural modernization with new urbanization, and comprehensively improve the overall AEE of counties. The research results are of guiding significance for deepening the study of AEE and can provide decision-making support for optimizing the mode of agricultural production and promoting the green development of regional agriculture.

How population aging promotes carbon emission reduction in Chinese cities: The chain mediating role of industrial upgrading and energy conservation

High carbon emissions and population aging are two obstacles to China's development as an emerging economy. It is urgent to scientifically examine the impacts of population aging on carbon emissions to discover new pathways for urban carbon emission reduction. However, existing studies face challenges in terms of focusing on and methodology for accurately capturing the role of industrial production and energy consumption in the environmental effects of population aging. This paper constructs a chain mediation analytical framework and systematically examines the intrinsic linkages between population aging and carbon emissions in Chinese cities from 2000 to 2020 using a two-way fixed effects model. This paper has three main findings. (1) The positive correlation between urban population aging and carbon emissions development is generally low, with coupling coordination degree values of 0.4233, 0.4458, 0.4220, 0.4715, and 0.4665 for each yearly cross-section. (2) For every 1% increase in the population aging rate, carbon emissions decrease by 0.3478% on average. The carbon reduction effect of population aging is significantly greater in low-emissions cities and high-income cities than in other cities. (3) The industrial upgrading (IU) path, energy conservation (EC) path and chain mediation (CM) path account for 72.43%, 7.23% and 20.34%, respectively, of the indirect effects. If the causal link between IU and EC is not considered, the EC effect will be overestimated by 281.16%. The results of the study suggest that properly coping with population aging and reducing carbon emissions are not completely opposed to each other, a conclusion that passes both endogeneity exclusion and robustness check. This paper advocates replacing the one-size-fits-all approach in carbon emissions management and investing more in policy preferences to support carbon emission reduction in both high-emissions and low-income cities.

Global Value Chain Participation, Employment Structure, and Urban–Rural Income Gap in the Context of Sustainable Development

Currently, the trend of globalization is evident, and global value chain participation has had a significant impact on the urban–rural income gap in China. This article takes sustainable development as the background and constructs a theoretical mechanism for the impact of global value chain participation on the urban–rural income gap and uses a two-way fixed effects model to empirically test data from 30 provinces in China from 2005 to 2014. Research finds that global value chain participation significantly widens the urban–rural income gap. Compared to the central and western regions, the participation of the eastern region in the global value chain has a more significant effect on widening the urban–rural income gap. Further research has found that employment structure plays a partial mediating role in the process of global value chain participation in widening the urban–rural income gap. The factor endowment structure and industrial structure upgrading can significantly strengthen the mechanism of global value chain participation in optimizing the employment structure. This article’s research findings have significant practical implications for reducing the income gap between urban and rural areas and fostering sustainable development in both.

Does less workload lead to more family educational care? Evidence from rural China

ABSTRACT Based on the theory of work – family balance, this paper employs a two-way fixed-effects model to explore the relationship between agricultural mechanization and investment in children’s education. The findings indicate that a county-level increase in the level of mechanization can stimulate financial and time investments in children’s education. Further heterogeneity analysis suggests that this impact is more pronounced on girls and primary school-aged children. The findings imply that reducing the labour burden on farmers will enable them to focus more on caring for their children.

A comparative analysis of the levels and drivers of regional coordinated development in the Yangtze River Economic Belt and Yellow River Basin, China

Positioned in the era of the transformation of China's primary social contradictions, this study delves into the new connotations of regional coordinated development(RCD) from the perspective of “factors” coordination within the region and constructs an RCD evaluation system from five subsystems of regional economic coordination(REC), urban-rural coordination(URC), economic and social coordination(EASC), resource and environmental coordination(RAEC), and material and spiritual civilization coordination(MASCC). Then, the Entropy weight-TOPSIS model is used to evaluate the RCD levels of the 19 provinces located in the Yangtze River Economic Belt(YREB) and Yellow River Basin(YRB) from 2010 to 2019, and the two-way fixed-effects model is employed to illustrate the driving mechanisms of various influencing factors on the RCD in YRB and YREB. The results show that:(1)the RCD levels of YRB and YREB show a fluctuating upward trend during 2010 and 2019, however, both regions have low RCD levels, as seen by the mean RCD indices for YREB and YRB, which are only 0.433 and 0.309, respectively. (2) The RCD level of YREB is higher than that of YEB. In 2019, the “coordinated” provinces in YRB and YREB account for 37.50% and 81.82% of the total number of provinces in the basins, respectively, the “uncoordinated” and “low coordinated” provinces all located in YRB. (3) The RCD of YRB and YREB is significantly improved by REC, URC and RAEC, but not significantly positively by MASCC or EASC, and insufficient development of MASCC is the main contradiction limiting the increase in the RCD level of YRB, while the low level of EASC has become the main obstacle limiting the RCD of YREB. (4)Finally, based on the varying impact degrees and directions of different influencing factors on the RCD in YRB and YREB, the recommendations to promote RCD are proposed.