Two-way Fixed Effects Regression Research Articles

Social trust and the winner-loser gap

The electoral winner-loser gap literature has shown sharp differences between citizens who vote for winning and losing options in key indicators of political support. In this article, we claim that the influence of election results can extend beyond the political domain and reach citizens’ level of social trust. Indeed, elections can reveal to citizens who voted for the winning option that their preferences are aligned with the majority opinion of society, while it signals the opposite to electoral losers. We hypothesize that this contrast will trigger a gap in the level of social trust between winners and losers, and that this gap will be larger among politically engaged voters relative to those more disinterested in political affairs. To contrast our hypotheses, we conducted two online panel surveys with a pre-post electoral design during two recent elections in Chile. Estimates from Two-way Fixed Effects regression models support our main theoretical expectations.

Adoption of clinical pharmacist roles in primary care: Longitudinal evidence from English general practice.

Over the last decade, the number of clinical pharmacists working within multidisciplinary teams in English general practice has expanded Aim: This study examines changes in quality of prescribing after the adoption of clinical pharmacists in English general practices. Two-way fixed effects regression was used to compare differences in prescribing indicators in general practices in England with and without pharmacists following implementation between September 2015 and December 2019 Results: Between September 2015 and December 2019, the proportion of practices employing a clinical pharmacist increased from 236/ 7,623 (3.10%) to 1,402/ 6,836 (20.51%). Clinical pharmacist implementation resulted in statistically significant reductions in total costs of medicines per 1,000 patients (-0.85% ,95% CI -1.50%, -0.21%), the total number of opioid prescriptions per 1,000 patients (- 1.06%, 95% CI -1.82%, -0.29%), and the average daily quantity (ADQs) of anxiolytics per 1,000 patients (-1.26%, 95% CI -2.40%, -0.12%). Clinical pharmacist implementation also resulted in reductions in the total number of prescriptions per 1,000 patients (-0.58%, 95% CI -1.30%, 0.13%), and the total number of antibiotic prescriptions per 1,000 patients (-0.51%, 95% CI -1.30%, 0.27%) that trended towards statistical significance. There were no statistically significant differences in the share of broad-spectrum versus narrow-spectrum antibiotics (0.02%, 95% CI -0.07%, 0.11%) and the oral morphine equivalence of high-dose opioids (>120mg per 24 hours) per 1,000 patients (1.19%, 95% CI -0.46%, 2.85%). Our analysis is limited by aggregate data at the practice-level but supports the hypothesis that clinical pharmacist implementation results in improvements in prescribing quality.

Digitalization and productivity in the Chinese wind power industry: the serial mediating role of reconfiguration capability and technological innovation

PurposeWind power is the most promising renewable energy source in China. The development of digital technologies has brought about unprecedented growth opportunities and prospects for wind power. However, the relationship between digital technology adoption and total factor productivity (TFP) in the wind power industry in China has not been empirically assessed. This study aims to clarify whether and how digital technology adoption affects the TFP of the wind power industry in China.Design/methodology/approachBased on the data of listed companies in the Chinese wind power industry from 2006 to 2021, this study proposes and verifies relevant hypotheses with two-way fixed effects regression models.FindingsThe empirical results indicate that digital technology adoption is the cornerstone of the TFP of China’s wind power industry. Reconfiguration capability and technological innovation serially mediate the above relationship. In addition, the incentive effect of digital technology adoption varies among wind power firms. The impact of digital technology adoption is more significant in firms that are old and located in economically undeveloped regions.Originality/valueThis study is one of the earliest attempts to investigate the relationship between digital technology adoption and TFP in the renewable energy sectors of emerging economies. By integrating dynamic capability theory and the analytical framework of “Capability-Behavior-Performance” into the digital context, this study offers the theoretical insights into how digital technology adoption can enhance organizational reconfiguration capability, thereby stimulating technological innovation and subsequent TFP. Additionally, the impacts of different digital technologies are estimated in entirety, rather than in isolation.

Impacts of the energy transition on public health in the context of country risk: From an international perspective

The global climate issue is becoming increasingly serious, and studying the energy transition (ET) has proven to be an effective solution to this problem. The essence of climate mitigation is to address the issue of ensuring the public health (pH) of human beings. Still, the definitions of ET in existing literature are inconsistent, and Many researches overlook the definitions of ET in official documents and discuss the relationship between ET and pH. Therefore, this research utilizes panel data from 107 countries over the period 2000–2020 to construct an energy transition indicator based on the definition from the World Economic Forum (WEF). It also examines the link between ET and pH using a two-way fixed effects regression. In the current turbulent international environment, this paper also investigates this link in the context of composite risk control (CRC), financial risk control (FRC), economic risk control (ERC), and political risk control (PRC). The results show that ET can significantly improve pH, a conclusion that remains significant after being subjected to a range of robustness tests. The study exploring the mechanism impact on the relationship between ET and pH shows that CRC, FRC, ERC, and PRC all strengthen the effect of ET on pH, and the mechanism effect varies considerably between high-income and low- and middle-income countries (LMICs); ET is more significantly affected by the mechanism in LMICs than in high-income countries. Furthermore, this paper illustrates that ET does not differ by gender in improving pH among infants, while there are gender differences in adults by using the instrumental variable regression and GMM regression to mitigate the endogenous and heteroscedasticity issue for heterogeneity test. The study in this paper can not only inspire policy researchers on which aspects to promote ET, but also provide a direction for improving pH.

Good governance and innovation: Economic freedom matters

The contribution of good governance to development has been extensively examined; however, the effects of good governance on innovation, a critical factor for achieving sustainable development in the volatility, uncertainty, complexity and ambiguity environment, have received limited attention. This study examines the effects of good governance on innovation and its channel mechanisms. Thus, using a two-way fixed effects regression model, we analyse data from a sample of 112 economies worldwide over the period 2011–2021. We determine that good governance, measured using the worldwide governance indicators, has positive effects on innovation. Moreover, based on the shaping effect of good governance on the external environment, we identify that economic freedom serves as a channel mechanism through which good governance impacts innovation. Furthermore, we observe that compared with advanced economies, the positive effects of good governance on innovation are more significant in samples of emerging markets and developing economies. These findings underscore the mechanisms through which good governance impacts innovation, drawing attention to the shaping effect of good governance on the external environment and offering empirical evidence for economies to enhance economic freedom and promote innovation.

The Effect of the Elected Chief Prosecutor on Punitiveness in Local Courtrooms

The United States currently leads the world in the number and proportion of individuals held under correctional supervision. Prosecutors are widely considered to be the most influential actors in the courtroom, and some current reform efforts center around prosecutor-driven reductions in punitiveness. However, little is known about the extent to which elected chief prosecutors impact punitiveness in local courtrooms. This study examines how dismissal and active sentence rates in nine mid- to large-sized prosecutorial districts in North Carolina are influenced by the identity of the elected District Attorney (DA) who was in office when the case was disposed. The study sample included four types of criminal cases (marijuana possession and sale, possession of firearm by felon, larceny, and driving while intoxicated) resolved in the nine districts from 2005–2018. A two-way fixed effects regression analyses showed that elected prosecutors significantly influenced dismissal and active sentence rates in their districts, typically to a small degree (by less than 5%) but sometimes by 20–30%. However, prosecutors did not influence punitiveness consistently across all crime types or according to traditional political party. This study suggests that the elected prosecutor matters in local criminal prosecution and enhances the current understanding of the power of the elected prosecutor to shape punitiveness in local courtrooms.

Managing Product Variety to Increase Sales in Used Automotive Closed-Loop Supply Chains

The relationship between product variety and sales has been extensively researched, but almost exclusively from the perspective of a new goods retail firm. Closed-loop supply chains for used goods, such as automobiles, offer unique challenges in terms of using reverse flows to create product variety at the retail location. Firms in used goods industries are unable to define their product mix a priori and may not even know which goods will be available to add to their sellable inventory. In this article, we use data from a used automobile retailer to explore these issues. A better understanding of the relationship between variety and sales can help used automobile retailers improve how they define and structure product variety at retail locations. Improved management of used automobile sales has obvious financial implications, but it also has important environmental implications, given the large contribution of passenger vehicles to overall emissions. This study implements a cluster analysis using consumer-facing variables to understand how customers view product variety for used automobiles. Our results show that three distinct classes of inventory exist, primarily driven by a key characteristic—body type—which differs from the traditional definition of product variety for new vehicles in the existing literature. A two-way fixed effects regression is then used to understand the relationship between product variety at the firm's retail locations and sales. The results demonstrate a nonlinear relationship between product variety and sales and, intriguingly, suggest that increasing product variety in some classes can be used to drive sales in others. Our findings yield important contributions for managers in used automobile firms and extend the broader literature on closed-loop supply chains. Specifically, our research demonstrates important differences in how product variety should be managed with used goods relative to new goods by a firm seeking to maximize sales.

Shifts in local governments’ corporatization intensity: evidence from German cities

Abstract Why do local governments create and reform public service companies, given their uncertain economic benefits and potential damage to accountability and service transparency? Taking an extended transaction cost perspective, we argue that corporatization—the provision of public services by publicly owned companies—is a function of fiscal hardship, the decision maker’s economic orientation and the level of operator transparency. Using a two-way fixed effects regression, we test this expectation on 680 investment reports of 34 German cities from 1998 to 2017, representing 11,062 year-corporatized entity combinations. We show that the drivers of corporatization are sensitive to the depth of local ownership analyzed. In doing so, we highlight the theoretical need and potential for conceptual differentiation between ownership levels along a corporation’s lineage. Exploiting the data’s panel structure, we also find that the intensity of corporatization has heightened since the late 1990s, largely due to increasingly complex corporate structures of indirect ownership.

Sports team success and managerial decisions: the role of playing-time concentration

PurposeProfessional sports teams employ highly paid managers and coaches to train players and make tactical and strategic team decisions. A large literature analyzes the impact of manager decisions on team outcomes. Empirical analysis of manager decisions requires a quantifiable proxy variable for manager decisions. Previous research focused on manager dismissals, tenure on teams, the number of substitutions made in games or the number of healthy players on rosters held out of games for rest, generally finding small positive impacts of manager decisions on team success.Design/methodology/approachThe authors quantify manager decisions by developing a novel measure of game-specific coaching decisions: the Herfindahl–Hirschman Index (HHI) of playing-time across players on a team roster over the course of a season.FindingsEvidence from two-way fixed effects regression models explaining observed variation in National Basketball Association team winning percentage over the 1999–2000 to 2018–2019 seasons show a significant association between managers’ allocation of playing time and team success. A one standard deviation change in playing-time HHI that reflects a flattened distribution of player talent is associated with between one and two additional wins per season, holding the talent of players on the team roster constant. Heterogeneity exists in the impact across teams with different player talent.Originality/valueThis is one of the first papers to examine playing-time concentration in the NBA. The results are important for understanding how managerial decisions about resource allocation lead to sustained competitive advantage. Linking coaching decisions to wins can help teams to better promote this core product.

Navigating the new normal: Examining coattendance in a hybrid work environment.

The recent rise of hybrid work poses novel challenges for synchronizing in-office work schedules. Using anonymized building access data, we quantified coattendance patterns among ~43k employees at a large global technology company. We used two-way fixed effects regression models to investigate the association between an employee's presence in the office and that of their manager and teammates. Our analysis shows that employee in-person attendance was 29% higher when their manager was present. Moreover, a 1-SD increase in the share of teammates who were present yielded a 16% increase in the individual employee's attendance. We also observed greater coattendance among employees who were recently hired, have a Corporate or Operations role, or work in shared office spaces. Thus, we find evidence of some voluntary alignment of work schedules. Companies could bolster such organic coordination by leveraging digital scheduling tools or providing guidance specifically aimed at increasing coattendance.

Evaluation of the IMPACT of a decision-support platform (Trapelo) on testing patterns for patients with advanced solid tumors.

513 Background: Given the evolving precision oncology landscape, it is challenging for oncologists to stay abreast of the latest biomarker testing guidelines. Texas Oncology (TxO), a network of community oncology providers, is evaluating Trapelo, a decision-support platform that assists in the ordering of appropriate biomarker tests. The objective of this study was to assess whether implementation of Trapelo’s testing pathways improves the ordering of timely and comprehensive biomarker testing (TCBT) among patients with advanced cancer. Methods: We conducted a retrospective analysis of patients with advanced non-small cell lung (NSCLC), metastatic breast (BC), or metastatic colorectal (CRC) cancer treated at TxO between July 24, 2018, and July 24, 2021, and had at least one oncology biomarker test ordered. The ‘Intervention’ group consisted of patients diagnosed after their physician’s onboarding to Trapelo; the ‘Control’ group consisted of patients diagnosed before onboarding. We also analyzed a subset of the intervention group: patients with biomarker tests actually ordered through Trapelo (Intervention - Trapelo.) Our primary endpoint, TCBT, was defined as the ordering of tests for all actionable biomarkers (i.e., with FDA approved first-line treatment) within 60 days following an advanced diagnosis. Because Trapelo implementation occurred over time, we used Two-Way Fixed Effects regression with fixed effects for time period and physician to assess the impact of the Intervention on TCBT. Results: In descriptive analysis, the rates of TCBT in the NSCLC cohort were 26, 28%, and 37% in the Control (n = 1023), Intervention (n = 554), and Intervention-Trapelo (n = 315) groups, respectively. In the CRC and BC cohorts, the rates were 32%, 40%, 55%, and 66%, 55%, and 45%, respectively. In the regression analysis, Intervention was associated with increases in TCBT rates of 7.5 ( p = 0.4) and 6.5 ( p = 0.4) percentage points in the CRC and NSCLC cohorts, respectively. The lack of statistical significance could be attributable to small sample sizes and clustered data by physicians. No differences were observed in the BC cohort. Conclusions: While trends observed in our study indicate that implementation of a decision support tool can improve rates of TCBT in a community oncology setting, studies with larger sample sizes are needed to assess the statistical significance of these findings. Despite these potential improvements, overall rates of TCBT, a critical aspect of optimal treatment in oncology, remained low. Further, over 43% of the NSCLC patients in the Intervention group did not have their orders placed through Trapelo, indicating an opportunity for improving post-onboarding adoption of Trapelo. Future analyses will investigate the impact of Trapelo utilization (as opposed to implementation/onboarding) on the receipt of TCBT.

Association of home and community-based services and cognitive function of Chinese older adults: social participation as a mediator

BackgroundThis study makes an effort to examine the impact of home and community-based services on maintaining cognitive function and understand the mediating effect of social participation on the relationship of community services and older adults’ cognitive function in China.MethodThe empirical data comes from the Chinese Longitudinal Healthy Longevity Survey (CLHLS). A total of 38,582 (person-time) respondents were gathered for this study. The two-way fixed effects regression model is used to estimate the associations between independent variables, mediating variables and cognitive ability after controlling for socio-demographic, family responsibility, and time variables.ResultThis study has confirmed that participating in daily and social activities is associated with the cognitive functions of Chinese older adults. Social participation can stimulate cognition. Active participation in outdoor activities, doing housework or taking care of kids, daily playing cards or mah-jong, reading books and newspapers, watching TV, and listening to the radio can significantly promote the cognitive ability of older adults. In addition, the findings have indicated the importance of community services for older adults. This study shows personal daily care services, legal aid services, health education services, as well as dealing with family and neighborhood disputes have a positive effect on maintaining older adults’ cognitive functions. Meanwhile, the provision of door-to-door medical services hurts their cognitive functions. This study also illustrates that community-based services can increase the level of older adults’ social participation, and then enhance their level of cognitive function.ConclusionThis study can inform service provision agencies to develop targeted programs to support older adults’ continued engagement.

Electricity saving behavior in student dorms: What message framing works?

Electricity consumption contributes largely to climate change. Inefficiently overused amounts of electricity can be reduced through low-cost feedback and nudges. We chose to frame different messages to alter the electricity usage behavior of students while residing in their dorm rooms at the Prince of Songkla University during the second semester of 2016. The messages used are descriptive and injunctive social norms information.The two-way fixed effects regression analysis indicates that reporting the dorm room's electricity usage and peer-comparison jointly with signs of social approval (injunctive social norms via emoticons) can effectively save electricity by 3.63%, with statistical significance at 0.1 level. We confirm that the “boomerang effect” occurs when reporting peer-comparison without injunctive social norms. No evidence proposes that students feel socially responsible for their electricity-induced CO2 emissions. Also, small-group peer-comparison cannot influence electricity conservation.Our results benefit universities in Thailand and our low-cost method is applicable to other tertiary education institutions in Southeast Asian economies that share similar social norms, especially on perceived wealth and the low interest in sustainability.

Digital finance and enterprise investment efficiency in China

This paper uses the panel data of Chinese listed enterprises from 2010 to 2019 to explore the relationship between digital finance (DF) and enterprise investment efficiency. The result of two-way fixed effects regression shows that the DF significantly improves enterprise investment efficiency. And the result is robust to different indicators of digital finance and possible endogenous biases. Further mechanism analyses find that the impact of DF on total debt was insignificant whereas it significantly changes financial composition which in turn affects the investment efficiency of enterprises. Specifically, the mediating effect of financial structure changes in both magnitude and direction with respect to the type of loans, and investment efficiency of under- and over-invested enterprises responses asymmetrically to the DF-induced financial structure adjustments. Overall, financial diversity decreases significantly with the inclusion of DF, which in turn improves enterprise investment efficiency. The results of this paper indicate that, in order to improve investment efficiency, the composition adjustment effect of DF should be further exerted with financing inclined to credit loans and guaranteed loans and guarding against excessive looseness of mortgage loans.

Social equity perception and public mental health: a Chinese study with panel data

BackgroundMental health is a vital part of an individual’s overall health and well-being, and the relationship between society and individuals has always been a focus of academic and public attention. However, the effect of social equity perceptions on individual mental health remains unclear.MethodsData were collected from 8,922 survey respondents with an average age of 47.533 years from the China Labor-force Dynamics Survey 2016 and 2018. The Center for Epidemiological Studies Depression scale was used to assess mental health. A two-way fixed effects regression model was used to determine the association between social equity perception and individual mental health.ResultsIndividuals with higher perceptions of social equity were more likely to report better mental health (beta = -0.944, p < 0.01). Happiness, life satisfaction, and social trust partially play mediating roles in the relationship between social equity perception and individual mental health, while education and age play moderating roles.ConclusionSocial equity perception is a vital factor that affects mental health. Public policies should focus on helping less educated and older people improve their social equity perception to improve their mental health.

Impact of Digital Economy Development on Industrial Structure Upgrading--Based on Two-way Fixed Effects Model Analysis

Digital economy is an important engine for building a modernized economic system. Through new generation information technology, it improves the operation efficiency of industrial chain and expands the innovation space of industrial chain, thus helping to upgrade the industrial structure. Based on the balanced panel data of 30 provincial administrative regions in China from 2012 to 2020, a two-way fixed effects regression model is constructed to empirically test and explore the impact of digital economy development on industrial structure upgrading. It is found that: Digital economy development can significantly promote industrial structure upgrading, and the conclusion still holds after a series of robustness tests. The promotion effect of digital economy development on industrial structure upgrading is regionally heterogeneous and social consumption level heterogeneous, which can significantly promote industrial structure upgrading in western and low social consumption level regions, but not in eastern, central and high social consumption level regions. Accordingly, policy suggestions are made in three aspects: vigorously developing digital economy, formulating regional differentiated digital economy development policies, and coordinating the relationship between consumption upgrading and supply side

A longitudinal assessment of racial and ethnic inequities in food environment exposure and retail market concentration.

This paper assesses trends in food environment and market concentration and racial and ethnic inequities in food environment exposure and food retail market concentration at the US census tract level from 2000 to 2019. Establishment-level data from the National Establishment Time Series were used to measure food environment exposure and food retail market concentration. We linked that dataset to race, ethnicity and social vulnerability information from the American Community Survey and the Agency for Toxic Substances and Disease Registry. A geospatial hot-spot analysis was conducted to identify relatively low and high healthy food access clusters based on the modified Retail Food Environment Index (mRFEI). The associations were assessed using two-way fixed effects regression models. Census tracts spanning all US states. 69 904 US census tracts. The geospatial analysis revealed clear patterns of areas with high and low mRFEI values. Our empirical findings point to disparities in food environment exposure and market concentration by race. The analysis shows that Asian Americans are likelier to live in neighbourhoods with a low food environment exposure and low retail market concentration. These adverse effects are more pronounced in metro areas. The robustness analysis for the social vulnerability index confirms these results. US food policies must address disparities in neighbourhood food environments and foster a healthy, profitable, equitable and sustainable food system. Our findings may inform equity-oriented neighbourhood, land use and food systems planning. Identifying priority areas for investment and policy interventions is essential for equity-oriented neighbourhood planning.

Quantifying the effect of socio-economic-geo drivers on the change of municipal waste disposal in China by an integrated TWFE-PRF-SDM methodology

Municipal solid waste management and disposal in China have significantly evolved since 2000. Due to China's vast land area and significant socioeconomic and geographic disparities, nationwide waste management strategies need to be further evaluated. This study quantified the effect of social, economic, and geographic drivers on municipal waste disposal activities in 31 provincial-level administrative regions from 2003 to 2020, by establishing a methodology integrated by two-way fixed effects regression model, panel random forest, and spatial Durbin model. The results showed, in the past two decades, socio-economic-geo indicators significantly co-decided the landfill and incineration activities. In particular, the explanatory ability of GDP per capita was above 45%, while land resources and city size also showed great significance. Spatial autocorrelation analysis showed that the relationship between landfill/incineration rates and socio-economic-geo drivers changed notably from unobvious to significant with economic growth. Furthermore, the local economy and land resources displayed more impact than those of the neighboring regions, while sci-tech and education showed clear spatial spillover effects. Chinese government would carefully assess the full-scale promotion policy of incineration plants, landfill is still hold as a reasonable option for regions with specific socio-economic-geo conditions.

Effects of performance-based capitation payment on the use of public primary health care services in Indonesia

The Indonesian national health insurance agency BPJS Kesehatan, the largest single-payer system in the world, is among the first to combine capitation-based payments with performance-based financing. The Kapitasi Berbasis Komitmen (KBK) scheme for puskesmas (community health centres) was implemented in province capitals between August 2015 and May 2016. Its main goal was to incentivize the substitution of secondary by primary care use. We evaluate its effect on its three incentivized outcomes: the fraction of insured visiting the puskesmas, the fraction of chronically ill with a puskesmas visit and the hospital referral rate for insured with a non-specialistic condition. We use BPJS Kesehatan claims data from 2015 to 2016 from a stratified one percent sample of its members. Comparable control districts were identified using coarsened exact matching. We adopt a Difference-in-Differences (DID) study design and estimate a two-way fixed effects regression model to compare 27 intervention districts to 300 comparable non-capital control districts. We find that KBK payment increased the monthly percentage of enrolees contacting a puskesmas with 0.578 percentage points. This is a sizeable increase of 48 percent compared to the baseline rate of just 1.2% but it still leaves most puskesmas far below the “sufficient” KBK threshold of 15%. For chronically ill patients, a small increase of 1.15 percentage points was estimated, but it leaves the rate even further below the program's “sufficient” threshold of 50%. We find no statistically significant effect on referral rates to hospitals for conditions not requiring specialist care. While we find positive effects of KBK on two out of three outcomes, all estimated effect sizes leave the actual rates far below the program targets. Our findings suggest that the KBK performance-based capitation reform has not been very successful in substituting secondary care use by greater primary care use.

Can Markets Improve Recycling Performance? A Cross-Country Regression Analysis and Case Studies

Can recycling reduce negative externalities created by landfills? Environmentalists argue yes; however, the efficiency of recycling will be institutionally contingent. Entrepreneurs will face less barriers to profit from recycling in countries with more economic freedom. Additionally, recycling conducted by private firms will be more cost-effective and have higher rates of innovation in recycling technology relative to a nationalized industry. The purpose of this study is to test these claims. First, a two-way fixed effects regression model is estimated using panel data from 34 countries over the years 2000 to 2019. Our regression results show that increases in economic freedom have a positive effect on recycling rates, independent of related policy effects. Second, using two brief case studies of the Republic of Korea and Taiwan, we show how the inefficiencies of bureaucratic management suggest that private industry can be a less costly solution to encouraging recycling. The empirical results and case studies strongly suggest that increases in economic freedom can be an important mechanism for increasing recycling rates, and private industry involvement in existing recycling programs can limit unnecessary costs.