Two-way Fixed Effects Model Research Articles

How Does Digital Transformation Improve Corporate Carbon Emission Reduction Performance? An Empirical Study on Data from Listed Companies in China

Against the backdrop of global carbon reduction, China, as the country with the highest carbon emissions, must implement carbon reduction actions more efficiently to promote the sustainable development of the global environment. Balancing their economic and environmental benefits has become an important issue for corporations, as they are crucial entities in the final implementation of carbon reduction efforts. This study selects the data of listed companies in China from 2012 to 2022 and develops a two-way fixed-effects model to verify the effect of digital transformation on corporate carbon reduction performance. The study found that digital transformation can positively promote corporate carbon reduction performance and shows heterogeneity under different conditions. Green technology innovation plays a mediating role in the relationship between digital transformation and corporate carbon reduction performance. Furthermore, environmental subsidies play a positive moderating role in the relationship between digital transformation and green technology innovation, constituting a moderated mediation model. Meanwhile, tax reduction incentives play a positive moderating role in the relationship between digital transformation and promoting corporate carbon reduction performance. This study provides empirical suggestions for balancing economic and environmental benefits for 5323 Chinese listed companies and global corporations from both internal and external perspectives, emphasizing the potential for digital transformation to drive both commercial success and environmental stewardship in the pursuit of sustainable development goals.

The Effect of Environmental, Social, and Governance (ESG) Performance on Corporate Financial Performance in China: Based on the Perspective of Innovation and Financial Constraints

This paper analyzes the effects of Environmental, Social, and Governance (ESG) performance on corporate financial performance (CFP), enriching the research on the intrinsic mechanism between ESG and financial performance in developing countries. This study uses a data sample of A-share listed companies in Shanghai and Shenzhen, China from 2009 to 2021, and adopts a two-way fixed effects model research methodology with fixed time and industries to explore the relationship and intrinsic mechanism between the two in conjunction with relevant basic theories. The study findings indicate that ESG performance exerts a positive influence on CFP by fostering corporate innovation. Corporations with good ESG performance in the long term may be more conducive to good CFP. When corporations face financial constraints, the role of ESG performance in enhancing CFP weakens. Heterogeneity analyses indicate that ESG performance contributes more to the CFP of non-state-owned enterprises (non-SOEs). The negative moderating influence of financial constraints is more pronounced in non-SOEs. Additionally, ESG performance promotes the improvement of CFP in non-heavy polluting corporates. This research study extends a scientific foundation for how corporates can improve CFP and increase market competitiveness.

중등학생의 인지조절전략과 학업 효능감의 관계

Objectives This study empirically examined how cognitive self-regulated learning strategies influence students' academic self-efficacy, considering variations in family backgrounds.
 Methods To achieve this, data from the 1st, 3rd, 5th, and 7th waves of the Korean Educational Longitudinal Study (KELS) 2013 cohort were used, selecting data based on the inclusion of cognitive self-regulated learning strategies in surveys (2nd, 3rd, 5th, 7th waves), post-middle school time points (3rd, 5th, 7th waves), and parental demographic background surveys (1st wave).
 Results Analyzing three time points of longitudinal data, vulnerable students showed lower academic self-efficacy and cognitive self-regulated learning strategies compared to non-vulnerable students. Using a two-way fixed effects model, an increase in cognitive self-regulated learning strategies had a static effect on changes in academic self-efficacy, with a greater impact observed among vulnerable students.
 Conclusions This study suggests evidence that socioeconomic-based disparities in students' academic self-efficacy can be mitigated. The need for additional cognitive self-regulated learning strategy education for vulnerable students is emphasized.

How does technological progress affect provincial financial resilience? Evidence at the provincial level in China

The ever-changing global economy and sudden global public health events have posed challenges to financial resilience worldwide. As its important role in maintaining domestic economic stability, safeguarding national security, and enhancing international status, financial resilience has long been widely studied. However, few studies have empirically explored how technological progress affects financial resilience. Based on data from 30 provinces in China, this study adopts a panel two-way fixed effect model to identify the impact of technological progress on financial resilience and the underlying mechanisms. Results show that technological progress can significantly enhance financial resilience, and this impact is stronger in provinces with large population size, high employment proportion in the tertiary sector, high social consumption capacity, and provinces located in Central China. Further, technological progress have a positive impact on financial resilience through increased asset liquidity and government intervention.

Housing Market and Household Consumption in Urban China: A Debt Perspective

Urbanization precipitates substantial economic transformations, with housing markets playing a pivotal role. The expansion of cities escalates housing demand, subsequently increasing housing debt, which is a crucial factor influencing household consumption. This study utilizes data from six rounds of the China Family Panel Studies (CFPS) spanning 2010 to 2020 to investigate the impact of housing debt on household consumption in urban China. Given the dynamics changes in housing debt status, as well as the endogeneity problems caused by reverse causality and selection bias between households’ debt decisions and consumption behavior, this study employs both the difference-in differences with multiple periods and groups (DIDM) model and the two-way fixed effects model. The results show that the average consumption expenditure of households with housing debt is 14% higher than those without. A 1% increase in housing debt size correlates with a 0.011% rise in consumption. Moreover, this positive effect is more pronounced among low-income households and those with older household heads, as well as those owning multiple properties. Compared to non-durable consumption, the impact of housing debt is more substantial on durable consumption. Further mechanism analysis reveals that the effect of housing debt on household consumption is primarily driven by an increase in housing assets, spurred by the rising housing prices. This study underscores the importance of integrating housing debt management within the framework of sustainable urban development, which not only ensures equitable access to housing but also fosters the promotion of sustainable consumption.

Will Women’s Representation Reduce Bribery? Trends in Corruption and Public Service Delivery Across European Regions

AbstractWhile a growing body of work suggests that women representatives are less likely to be involved in corruption scandals, we know less about if changes in representation patterns also have implications for citizens’ first-hand experiences with corruption in public service delivery. This study suggests that women elected representatives reduce street level bribery, in particular when the share of women increases in contexts where relatively few women are elected or when the absolute increase in women’s representation is relatively large. Using newly collected data on the share of women in 128 regional level parliaments in 10 European countries and four rounds of the European Quality of Government Index (EQI) survey (2010–2021), our two-way fixed effects models show that on average, the proportion of women in regional parliaments is strongly associated with citizens’ self-reported experiences of bribery across all countries and years. Furthermore, our difference-in-difference design shows that the level of bribery in public service provision dropped more sharply in regions that experienced a greater absolute or greater marginal increase in women’s representation. Our results may be understood in light of women candidates placing priority on well-functioning and low corrupt public service provision and the important signals of inclusiveness, non-discrimination and decreased tolerance towards corruption that women’s representation conveys to civil servants.

The Impact of Rural Population Aging on Agricultural Cropping Structure: Evidence from China’s Provinces

Agricultural cropping structure is related to the quality of the agricultural supply system and is a key element of the structural reform of the agricultural supply side. Based on China’s provincial panel data from 2000 to 2021, this paper empirically examines the impact and mechanism of rural population aging on the planting structure of food and cash crops by using a two-way fixed-effects model, which fills the gap in the research on the impact mechanism of the rural population aging on agricultural planting structure. The conclusions of the study show that: as the aging of the rural population deepens, the proportion of food crops planted will further increase, while the proportion of cash crops planted will decrease; agricultural mechanization will promote the further increase of the proportion of food crops planted while the proportion of cash crops planted will decrease in the deepening of the aging of rural population; the aging of the rural population has a more significant impact on the structure of agricultural planting in the eastern region and does not have a significant impact on the central and western provinces. The aging of the rural population has a significant impact on the agricultural planting structure in the eastern region, but not in the central and western provinces. This paper argues that we should fully respect the willingness of agricultural management subjects to choose planting varieties, increase the research, development, and promotion of agricultural machinery, continuously improve the level of farmers’ human capital, and further enhance the degree of organization, scale, and specialization of agricultural production.

Spatio-Temporal Dynamics of Economic Density and Vegetation Cover in the Yellow River Basin: Unraveling Interconnections

Vegetation, serving as the primary constituent of terrestrial ecosystems, plays a crucial role in regulating energy flow and material cycles and providing vital resources for human socio-economic activities. This study analyzes the spatio-temporal patterns of economic density and vegetation coverage in the Yellow River Basin (YRB) based on forest resource inventory and socio-economic data from 448 counties in 2008, 2013, and 2018. A three-tiered criterion layer is constructed using economic density as the core explanatory variable, encompassing social development factors, land use factors, and natural factors. A two-way fixed effects model is then utilized to analyze the impact of economic density on vegetation coverage. Results reveal that: (1) Spatially, economic density demonstrates a “low in the west and high in the east” pattern, with an overall upward trend in the YRB. Conversely, vegetation cover exhibits a “high in the west and low in the east” pattern, displaying a downward trend. (2) Over the 2008–2018 period, a significant negative correlation between economic density and vegetation cover is observed in each county of the YRB, with vegetation cover decreasing by 1.108% for every 1 unit increase in economic density. Notably, the upstream areas of the YRB experience a significant increase in vegetation coverage, while the middle and lower reaches witness a decrease. (3) Considering control variables, the proportion of the primary industry, urbanization rate, forest protection level, and cultivated land area exert a significant influence on vegetation coverage across the entire basin. Policymakers should formulate relevant policies to achieve sustainable development in the YRB, as discussed in the proposed countermeasures. This study delineates a practical pathway for high-quality economic development and high-level ecological protection in the YRB, offering a valuable reference for analogous research in other regions.

The Influence of Digital Economy on The Vitality of Urban Double Innovation

Under the new development pattern, the rapid development of digital economy is becoming the core force to change the global economic and social structure. At the same time, China is speeding up the conversion of old and new kinetic energy, and how to activate China's dual-innovation vitality is the focus of attention from all walks of life. Based on this, this project, based on the panel data of 285 prefecture-level cities in China from 2011 to 2019, studies the influence of regional digital economic development index on urban innovation vitality through two-way fixed effect model and intermediary effect model. It is found that the digital economy can promote the promotion of urban innovation vitality, and this conclusion is still valid after replacing the robustness test of the explained variables. The further mechanism test shows that the upgrading of industrial structure is an important intermediary variable for the digital economy to enhance the dual-innovation vitality of cities, and the digital economy can promote the dual-innovation vitality of cities through the upgrading of industrial structure.

Housing debt and depressive symptoms: evidence from the China family panel studies

BackgroundThere is limited evidence on the association between housing debt and depressive symptoms in China. This study aimed to examine the impact of housing debt on depressive symptoms and explore the heterogeneous impacts arising from two sources of housing debt and two types of housing demands.MethodsUsing data from the 2016 and 2018 China Family Panel Studies (CFPS), this study included 25,232 Chinese individuals. Depressive symptoms were assessed using the eight-item Center for Epidemiological Studies Depression Scale (CES-D8). Housing debt was measured by dummy variables, indicating whether an individual had housing debt, and continuous variables, which were the logarithm of the total amount of housing debt. The two-way fixed effects model was used to examine the relationship.ResultsHousing debt had a significant positive impact on depressive symptoms in China. Individuals with housing debt had a 0.176-point higher depressive symptom score than those without housing debt. A 10% increase in the total amount of housing debt led to a 0.16-point increase in depressive symptoms. Non-bank housing loans significantly increased the level of depressive symptoms with a larger coefficient (coef = 0.289), while the impact of bank housing loans was small and not statistically significant. In terms of the types of housing demands, a positive impact was observed only among individuals who had only one property meeting their housing consumption demands.ConclusionsThis study found a significant positive impact of housing debt on depressive symptoms, primarily driven by non-bank housing loans. Furthermore, housing debt increased the depressive symptoms among individuals with consumption demands, while those with investment demands did not show a significant impact. Government interventions should prioritize easing formal financial constraints and providing support for individuals with housing consumption demands.

On the relationship between lemon effect and worker characteristics: evidence from Korea

ABSTRACT Layoffs can negatively affect a worker’s wage in the presence of incomplete information on the worker’s productivity (‘lemon effect’). This study examines whether such an effect is present in Korea by utilizing the Korea Labor and Income Panel Study (KLIPS) data from 1998 to 2021 with a two-way fixed effects model. We find supporting evidence for the lemon effect: The drop in wage is generally greater for workers who experience layoff than those displaced due to firm closure. This observation is more evident for those (1) who worked at a small-to-medium firm, (2) who got re-employed in a different industry and occupation, and (3) who were laid off during economic booms at which information asymmetry is more pronounced.

How can restricted farmland development rights be compensated to stimulate farmland protection? A provincial exploration in China

Stimulating farmland protection (FP) is crucial to ensure food security and environmental well-being. Some countries, including China, are seeking to incorporate transferable development rights (TDR) to realize economic incentives for FP. This study developed an indicator – planning regulation intensity on farmland (PRIF) – to describe the restricted farmland development rights (FDRs) and designed a compensation-oriented farmland transferable development rights (FTDR) mechanism. The threshold model and two-way fixed effect model were employed to unlock the transfer direction, quantity, and economic value of FDRs. Taking Hubei Province in China as the study area; the empirical research was conducted and demonstrated the necessity and feasibility of implementing the compensation-oriented FTDR mechanism in China. This study addresses the issue of unfair distribution of FDRs due to planning regulations and provides a promising economic-incentive policy instrument for curbing farmland loss. The FTDR mechanism considering PRIF that we propose enables the extension of TDR to countries that implement authority-exerted planning regulations.

Digital Economy, Energy Structure and Carbon Emissions: Evidence from China

The digital economy is an important driving force for China’s economic transformation and upgrading, while “carbon peaking and carbon neutrality” is the goal to be achieved in China. Based on the panel data of 30 Chinese provinces (cities and districts) from 2012 to 2019, the article empirically investigates the impact of the digital economy on regional carbon emissions and its mechanism of action by using a two-way fixed-effects model and mediated-effects model. The study shows that, firstly, the digital economy has a significant carbon emission reduction effect, and the conclusion still holds after robustness testing. Secondly, the emission reduction effect of industry digitization in the digital economy dimension is the most obvious. Again, the carbon emission reduction effect of digital economy development on different regions varies, with the strongest carbon emission reduction effect on western regions and regions with high carbon emission levels. Finally, the analysis of mediating effects shows that the energy structure is an important mechanism for the digital economy to suppress regional carbon emissions. The findings of the study provide a feasible path and policy reference for the digital economy to contribute to the goal of “carbon peaking and carbon neutrality.”

The Influence of ESG Performance on Corporate Value: An Empirical Analysis of Chinese A-Share Listed Sports Companies

This study uses a two-way fixed-effect model to analyze the impact of ESG performance on corporate value based on the quarterly data of Chinese A-share listed sports companies from 2018 to 2022. The results prove that (1) The ESG performance of sports enterprises positively affects corporate value: the higher the ESG score is, the higher the corporate value is. (2) Mechanism analysis shows that financing constraints play a partially mediating role in the relationship between ESG performance and corporate value. (3) Heterogeneity analysis shows that corporate political relations will weaken the facilitating effect of ESG performance on corporate value. The stronger the political relations are, the weaker the facilitating effect of ESG performance on corporate value. Compared with that during the bear market, the performance of ESG in the bull market has a greater facilitating effect on corporate value. Compared with sports service enterprises, sports goods enterprises’ ESG performance has a stronger facilitating effect on corporate value.

A single dose for me, A wealth of protection for us: The public health cost of individualism in the rollout of COVID-19 vaccine

ObjectiveThis study examines whether individualism weakens the effectiveness of the COVID-19 vaccine eligibility expansions in the United States in 2021, and assesses the associated social benefits or costs associated with individualism. MethodsWe construct a county-level composite individualism index as a proxy of culture and the fraction of vaccine eligible population as a proxy of vaccination campaign (mean: 41.34%). We estimate whether the COVID-19 vaccine eligibility policy is less effective in promoting vaccine coverage, reducing in COVID-19 related hospitalization and death using a linear two-way fixed effect model in a sample of 2866 counties for the period between early December 2020 and July 1, 2021. We also test whether individualism shapes people's attitudes towards vaccine using a linear probability model in a sample of 625,308 individuals aged 18–65 (mean age: 43.3; 49% male; 59.1% non-Hispanic white, 19.1% Hispanic, 12% African American; 5.9% Asian) from the Household Pulse Survey. ResultsThe effects of expanded vaccine eligibility are diminished in counties with greater individualism, as evidenced by lower effectiveness in increasing vaccination rates and reducing outpatient doctor visits primarily for COVID-related symptoms and COVID deaths. Moreover, our results show that this cultural influence on attitudes towards vaccine is more pronounced among the less educated, but unrelated to race. ConclusionAssuming an average level of vaccine eligibility policies and an average intensity of individualism across the nation, we calculate that the average social cost associated with an individualistic culture amid the pandemic is approximately $50.044 billion, equivalent to 1.32% of the total U.S. health care spending in 2019. Our paper suggests that strategies to promote public policy compliance should be tailored to accommodate cultural and social contexts.

Beyond the brink: Unraveling the opioid crisis and its profound impacts

This paper examines the long-standing and severe public health crisis, the opioid epidemic in the United States, which has been worsening since the mid-1990s. In contrast to previous research, it investigates the broader impacts of this epidemic, particularly on family members and healthcare systems. Using a comprehensive dataset spanning from 1998 to 2010, the study analyzes opioid use at the three-digit ZIP code level, utilizing data from the Drug Enforcement Agency (DEA) and individual-level data from the Health and Retirement Study (HRS) in a two-way fixed effect model. The findings reveal significant negative effects on family caregivers, notably adult children, due to the opioid epidemic. Additionally, opioid exposure is associated with increased healthcare utilization, including home health care and hospital use. This research contributes to a deeper understanding of the multifaceted consequences of the opioid epidemic.

Balancing the scales: How housing supply regulation shapes household wealth inequality in China

Given its significant implications for the economy and society, this paper investigates the impact of housing supply regulation on household wealth inequality. Utilizing data from the China Household Finance Survey and land transaction records spanning from 2013 to 2019, we employ recentered influence function regression and two-way fixed effects models to analyze the effect of unexpected housing supply shocks on the wealth gap among households. Our findings reveal that positive unexpected housing supply shocks are crucial in reducing household wealth inequality. This reduction is attributed to the heterogeneous impacts of housing supply regulation on different wealth groups. By deregulating the housing supply, the upward trend in housing prices has slowed, which in turn makes homeownership more accessible and facilitates wealth accumulation for households that fall within the 20 % and 80 % wealth quantiles. Conversely, deregulation has a negative impact on property values for households in the 80–100 % wealth quantile, thus mitigating their overall wealth growth. Overall, this study emphasizes the significant role of housing supply regulation in shaping wealth inequality in China.

Criminal governance and public resources: The case of paramilitaries and health care provision in Colombia

Non-state armed actors can shape provision of public goods by impeding provision, becoming providers themselves, or taking control of the means for provision. While the literature is prolific at analyzing the former two channels, the third one is underexplored. How does criminal governance affect public goods provisioning via state capture? And do these dynamics facilitate the survival of non-state armed groups? This paper seeks to answer these questions. I argue that institutional cooptation by non-state armed actors (NSAs) affects public goods provisioning negatively in contexts of institutional decentralization. In these circumstances, public resource transfers can strengthen rather than weaken NSAs. To test my argument, I analyze the Colombian case, where criminal insurgencies took control of and diverted public health funds toward their pockets. Using data on health care providers, as well as the presence of NSAs at the municipal level, I show via two-way fixed effects models that municipalities experiencing paramilitary cooptation see a decrease in public health care provision. Similarly, public resource transfers decrease paramilitary demobilizations. This has important implications for the evaluation of decentralization as a strategy for political stabilization, peacekeeping, and development in fragile contexts, as well as for understanding the impact of public spending in strengthening rather than weakening NSAs.

Rural household energy transition in China: Trends and challenges

Against the backdrop of both environmental and health issues caused by inefficient combustion of solid fuels in households, the transition to clean energy is a critical development imperative. This study uses publicly available administrative data spanning nearly 30 years at the provincial level to characterize the “business as usual” (BAU) energy transition in China's rural household sector in order to inform interventions needed to achieve clean energy goals. We first describe the temporal trends and spatial characteristics of energy transitions over the past three decades. We then use a simple two-way fixed effects model to estimate the role that household income growth plays in this transition process. Finally, we predict the timeline for the BAU rural energy transition with an autoregressive integrated moving average (ARIMA) model. Our results show that China's rural household sector has gradually undergone a consistent but geographically uneven transition over the past three decades. Compared with warmer provinces without indoor heating, where a 1000 RMB increase in per capita income is associated with a 5–10% increase in the share of clean energy, in provinces with heating needs the predicted effect is less than 2%. ARIMA model projections suggest that without policy interventions, for most provinces in northern China the share of clean energy would remain less than 40% by the year 2050. The “clean heating program” implemented in the North China Plain in 2015 has therefore advanced the energy transition by 10 years in just the 3 years between 2015 and 2018. Together, these results show the potential for interventions in helping spur energy transitions.

Narrative R&D disclosure and bank loans: Evidence from China

By taking advantage of machine learning and textual analysis method to construct narrative R&D disclosures, we investigate the impact of narrative R&D disclosures of China's listed firms on their access to bank financing with the two-way fixed effects model. We found that narrative R&D disclosures lead to an increase in bank financing of listed firms. This conclusion still holds after a series of robustness and endogeneity tests. Additionally, it is found that the enhancement of incremental information and banks' superiorities in processing complicated public information are the mechanisms. Finally, we further find that the positive impact of narrative R&D disclosures on bank loans is mainly manifested in the sample of firms operating in highly competitive industries, non-state-owned in nature and R&D-intensive.