Unbalanced Panel Data Research Articles

Impact of agricultural extension services on rice productivity and profitability in Bangladesh

Agricultural extension services play a pivotal role in promoting sustainable agriculture, particularly in developing countries where many farmers are resource-poor. Enhancing farmers’ profitability and productivity is essential to meet the increasing demand of a growing population. This study aims to examine the impact of agricultural extension services on the profitability and productivity of rice farmers in Bangladesh. The analysis uses unbalanced panel data from the International Food Policy Research Institute’s Bangladesh Integrated Household Survey for 2015 and 2018. The Mann–Whitney U test was used to assess whether the differences between the participant and non-participant groups were statistically significant. Additionally, a probit regression model is used to identify the determinants of participation in agricultural extension services. The findings reveal that participation is positively influenced by access to subsidies, distance to market, occupation and livelihood vulnerability. The impact of agricultural extension services on farm productivity and profitability is assessed using difference-in-difference and random effect generalized least squares models. The results show that agricultural extension services significantly contribute to both farm profitability and productivity. This suggests that governments should intensify and monitor the delivery of agricultural extension services, particularly focusing on the timely provision of support resource-poor farmers.

Examining the impact of intellectual capital on underwriting risk of insurance companies in Pakistan: static and dynamic panel regression

Purpose This study aims to examine the impact of intellectual capital on the underwriting risk of insurance companies in Pakistan. Design/methodology/approach The study used a quantitative research approach and a longitudinal research design, gathering data from 23 insurance companies listed on the Pakistan stock exchange from 2010 to 2022. The value-added intellectual coefficient (VAIC) was used to measure intellectual capital (IC), and unbalanced panel data were analyzed using static and dynamic regression analyses. Findings The findings demonstrate a significant association between intellectual capital and underwriting risk in insurance companies in Pakistan. Specific components of intellectual capital, such as human capital efficiency (HCE), structural capital efficiency (SCE) and capital employed efficiency (CEE), have a strong negative impact on underwriting risk. Control variables like return on assets, insurer size and leverage also showed significant relationships with underwriting risk. Originality/value This research provides new insights into the theoretical understanding of the insurance industry by establishing a direct link between intellectual capital and underwriting risk in the context of Pakistan. It suggests that by improving aspects of intellectual capital, specifically HCE, SCE and CEE, policymakers and managers can reduce underwriting risk.

Can digital financial inclusion promote the nighttime economy? - New evidence from Chinese counties’ nighttime lighting data and threshold model

In the post-pandemic era, the relative weakness of the economy is reflected not only in the macro data but also in the nighttime economy. Based on the threshold model and unbalanced panel data of 1772 county-level administrative units in China from 2014 to 2020, this paper deeply explores the relationship between digital inclusive finance and night economy and draws the following conclusions. (1) When digital financial inclusion exceeds certain thresholds, its beneficial influence on promoting the nighttime economy increases from 8.13% to 26.59% and 87.71%. (2) Digital financial inclusion promotes the nighttime economy by increasing employment in the secondary industry and promoting technological innovation. However, digital financial inclusion hinders the nighttime economy by reducing entrepreneurial activity in the accommodation and catering sectors. (3) Coverage breadth first inhibits, then promotes, and inhibits the nighttime economy in different intervals; the effect of usage depth and digital level on the nighttime economy in intervals shows an increasing trend. (4) In the Yangtze River Economic Belt region, digital financial inclusion initially inhibits the nighttime economy but turns into promotion as it develops; after the implementation of the rural revitalization strategy in 2017, digital financial inclusion can more positively and significantly promote the nighttime economy.

Grandchild care and grandparents’ well-being in context: The impact of the covid-19 pandemic

Abstract Background and Objective This study investigates whether the association between supplementary grandchild care and grandparents’ subjective well-being—measured as life satisfaction, perceived stress, and loneliness—is moderated by the contextual environment. We use the Covid-19 pandemic as an example for contextual differences. Drawing on role theory, we argue that the costs and benefits of grandparenting may have differed between pandemic and pre-pandemic times. On the one hand, providing grandchild care during the pandemic may have been particularly stressful, prompting more negative effects on well-being. On the other hand, grandchild care may have been particularly relevant for enhancing well-being, as it protected grandparents from social isolation. Moreover, the association between grandparenting and well-being may have differed by gender. Research Design and Methods Using unbalanced panel data from the German Ageing Survey (DEAS) 2014 (n = 3,619), 2017 (n = 2,458), and 2020 (n = 2,021), we applied maximum likelihood structural equation modeling (ML-SEM)—a method that combines dynamic panel modeling with fixed-effects analysis—to examine whether there were differences in the relationship between grandchild care and grandparents’ well-being when comparing pandemic and pre-pandemic times and by grandparents’ gender. Results Grandchild care was associated with lower loneliness for both grandmothers and grandfathers. For grandfathers, this association was even stronger during the pandemic. Grandmothers experienced higher life satisfaction when taking care of grandchildren during the pandemic, but there was no evidence that grandchild care increased perceived stress for either grandmothers or grandfathers. Discussion and Implications In line with role enhancement theory, this study highlights that supplementary grand child care can be beneficial for grandparents’ well-being. Moreover, the context in which grandchild care takes place shapes the costs and rewards associated with it. Our results suggest that supportive policies and programs facilitating grandchild care can enhance grandparents' well-being, especially in challenging contexts.

The Impact of Country Risk on Innovation: Global Evidence

This article examines the impact of country risk on the level of innovation. Through empirical analysis of unbalanced panel data from 106 countries around the world from 1990 to 2020, we find that reducing country risk has a pro-innovation effect, and this conclusion holds after a series of robustness tests. We also find that the impact of country risk on innovation is more significant in countries with better infrastructure, democracies, lower income, lower political stability, and countries governed by left-wing parties. The impact of country risk on innovation is also more significant in high-tech industries than in traditional manufacturing industries. The mechanism analysis shows that country risk reduction promotes innovation by increasing and improving government efficiency, human capital, and the business environment. This study expands the research areas related to country risk and provides evidence for understanding the relationship between country risk and innovation.

Female leadership and financial sustainability of MFIs: the moderating role of female borrowers

PurposeThe purpose of this study was to investigate whether the percentage of female borrowers moderate the effect of female leadership on financial sustainability of microfinance institutions (MFIs).Design/methodology/approachThe study collected an unbalanced panel data of 821 MFIs between 2007 and 2018 from the Microfinance Information Exchange (MIX). MFIs’ financial sustainability was measured as operational self-sufficiency (OSS). The data were analyzed using the fixed effect regression model.FindingsThe study found that having women participation in managerial and board positions has a positive effect on OSS. The results further demonstrated that the proportion of female loan officers and female borrowers had a negative effect on OSS. In addition, the study’s findings revealed that the percentage of female borrowers moderated the relationship between female board members, female managers, female loan officers and OSS.Practical implicationsThese findings may offer important insights to policymakers and practitioners in formulating strategies to improve financial inclusion for women by examining the inherent link between female borrowers and women’s participation in leadership roles within MFIs, which affects the financial sustainability of these entities.Originality/valueThis study is among the few that have examined the interaction between the proportion of female borrowers and other forms of female participation, including loan officers, managers and board members, and its effect on the financial sustainability of MFIs.

Nexus between Financial Inclusion and Poverty: Does the Country's Education matter? Evidence from Lower-Middle-Income Countries

There are special relations between financial inclusion and social inclusion with the latter being one of the best addressed when people have access to financial services. This paper explores effects of financial access on poverty, while incorporating moderation effects by years of schooling. Therefore, this study utilizes unbalanced panel data of 17 lower-middle-income countries itself and both the above mentioned static and dynamic panel model to conduct a strict panel data analyse. The analysis of data, employing the Composite Financial Inclusion Index (CFII) as an instrument to assess financial inclusion, shows that the level of financial inclusion and poverty in these countries are negatively related and sharply influenced. Also, the study discovers that there is a positive correlation between the financial inclusion, and Poverty reduction after controlling the effects of education attainment. They provide useful recommendations for policymakers, institutions dealing with money, and governments. First, financial services must be brought nearer to the poor populations which can reduce poverty level in the society. Second, a subsequent improvement of the education level is required to achieve the best results for financial inclusion on poverty reduction.

Level of social security expenditures and economic growth rate based on econometric regression modelling: New evidence from OECD countries

This research article examines the relationship between the level of social welfare expenditure and economic growth rates, based on unbalanced panel data from 38 OECD countries covering the period from 1985 to 2022. Four hypotheses are formulated regarding the impact of social expenditure on economic growth rates. Through multiple iterations of regression model building, employing various combinations of dependent and independent variables, and conducting tests for stationarity and causality, compelling empirical evidence was obtained on the negative influence of social welfare spending on economic growth rates. The study takes into account both government and non-governmental expenditures on social welfare, a novelty in this field. This approach allows for a detailed examination of the effects of different components on economic growth and provides a more comprehensive understanding of the relationships. The findings indicate that countries with high levels of social welfare spending experience a slowdown in economic growth rates. This is associated with increasing demands on social security systems, their growing inclusivity, and the escalating required levels of financing, which are increasingly covered by debt sources. The research highlights the need to strike a balance between social expenditures and economic growth rates and proposes a set of measures to ensure economic growth outpaces the indexing of social expenditures. The abstract underscores the relevance of the study in light of the widespread recognition of the necessity to combat inequality, poverty, and destitution, and calls on OECD countries’ governments to pay increased attention to social policy in order to achieve sustainable and balanced economic growth.

Better safe than sorry? The effect of asymmetric cost management on firm resilience in manufacturing firms

PurposeGlobal business practices show that during periods of demand volatility, manufacturing firms often engage in asymmetric cost management (ACM), a behavior in which costs increase faster than they decrease when demand decreases by the same amount. However, whether managing asymmetric costs will enhance or impede firm resilience remains an open question. We aim to investigate the impact of ACM on firm resilience and its boundary conditions.Design/methodology/approachUsing unbalanced panel data of 2,273 Chinese manufacturing listed companies from 2002 to 2021, we conduct an empirical analysis using a double fixed effects model.FindingsOur findings reveal that ACM has a negative effect on firm resilience. This suggests that in coping with external environmental fluctuations, ACM fails to fulfill its expected role effectively. Instead, it manifests as a severe agency problem affecting firm resilience. Further, we find that managerial myopia and digitalization diminish the negative effect, while customer instability exacerbates it.Originality/valueThis study contributes to the literature on the organizational resilience of manufacturing firms by providing an in-depth understanding of cost management and emphasizing the need to consider agency issues carefully when managing asymmetric costs.

Dynamics of capital structure determinants: empirical evidence from GCC countries

AbstractThe study empirically examines the factors affecting the financing decisions of non-financial listed companies in Gulf Cooperation Council (GCC) countries. Using static and dynamic two-step generalized method of moments techniques, it analyzes unbalanced panel data from 364 non-financial companies across six GCC countries from 2011 to 2021. The findings partially support optimal capital structure theories, highlighting significant internal factors such as profitability, market-to-book ratio, firm size, earnings volatility, and growth opportunities that influence financing decisions. While no single theory fully explains the financing choices, the association of internal factors with book and market leverage is consistent. The study provides robust and generalizable results, aiding financial institutions and policymakers in formulating pro-development policies and regulations. This research facilitates better coordination between corporate managers and financial institutions, supporting the region’s economic transition. It is the first study to use extensive data from GCC non-financial firms to investigate financing decisions, offering valuable insights for investors and a basis for further analysis of capital structure choices in the region and beyond.

The causal relationship between government investment and economic development in ASEAN countries

The purpose of this article is to evaluate the impact of public investment on economic growth. The data was used from the annual data of the Asian Development Bank (ADB) for 6 countries in ASEAN during 2000-2022. The methodology used in the project is to apply the unit root test to the stationarity properties of individual time series and establish the cointegration relationship between non-stationary variables using methods related to cointegration testing in the long-run. The error correction model (ECM) considers the impact of the variables public investment, public expenditure and budget revenue from taxes on short-term economic growth and long-term growth thereby calculating the adjustment speed and adjustment time of the model and using the Granger causality test with fixed effects for analysis of unbalanced panel data to comprehensively analyze the relationship between public investment and economic growth. Data analysis and processing were performed using Stata software version 17. The findings that public investment has a long-term impact on economic growth and has a two-way causal relationship in all countries. The authors provide policy implications to make public investment more effective contributing to promoting the country's socio-economic development, reviewing and improving the legal system on public investment, restructuring public investment while strongly enhancing the efficiency and quality of public investment, inviting and attracting foreign direct investment (FDI) capital, diversifying capital sources and creating more motivation for the private economic sector to develop and promulgate solutions to develop high-quality human resources.

Does financial expertise influence Islamic bank risk-taking?

PurposeThis study investigated how the financial expertise of the board of directors, risk management committee (RMC), audit committee (AC) and Shariá Supervisory Board (SSB) influences the risk-taking of Islamic banks.Design/methodology/approachThe study utilized unbalanced panel data for a sample of 43 full-fledged Islamic banks from 15 countries over 12 years (2010–2021). We employed feasible generalized least squares (FGLS) and heteroskedastic panels corrected standard errors (HPCSE) regression regressions as the primary estimation methods and used a two-step system generalized method of moments (GMM) estimator for robustness checks.FindingsThe results indicate that board financial expertise decreases insolvency and credit risks. Similarly, AC financial expertise and SSB financial expertise reduce insolvency and portfolio risks but increase credit risk. In contrast, RMC financial expertise raises insolvency risk. The remaining relationships are statistically insignificant.Research limitations/implicationsDue to the lack of disclosure regarding the educational and professional background of the board and committee members in the annual reports of some Islamic banks, this research used a sample of only 43 full-fledged Islamic banks operating in fifteen countries from 2010 to 2021.Practical implicationsThe findings can assist both local and international regulators in revising corporate governance codes and risk management guidelines in such a way as to ensure that the financial experts appointed to the board, AC, RMC and SSB, are capable of controlling excessive risk-taking behavior in Islamic banks.Originality/valueThis study contributes to the literature by providing comprehensive empirical evidence that corporate governance financial expertise influences the risk-taking behavior of Islamic banks.

The impact of customer concentration on the provision of reverse trade credit

PurposeThe purpose of this study is to investigate the impact of customer concentration on the provision of reverse trade credit at the firm level.Design/methodology/approachUtilizing unbalanced panel data of Chinese A-share listed firms from 2007 to 2022 as the study sample, this paper employs a fixed-effects model to investigate the association between customer concentration and firms’ reverse trade credit.FindingsThis study finds that firms with higher customer concentration receive less reverse trade credit. Heterogeneity tests reveal a significant amplification of reverse trade credit in high-tech firms but a detrimental impact in large-sized, competitive and high-analyst-following firms. Further studies conclude that firms’ motivations, including bargaining power, financing and transaction guarantee motivations, collectively influence the extent of reverse trade credit acquisition.Originality/valueTo our knowledge, this paper represents the first attempt to conduct a comprehensive investigation of reverse trade credit, specifically through the lens of customer concentration, utilizing firm-level panel data sourced from a singular country.

Digital Transformation and Green Innovation Synergy: Double Drivers for Global Value Chain Upgrading in China's Construction Machinery Industry

With the digital transformation of the global economy and the deepening of the concept of sustainable development, China's construction machinery industry faces major opportunities and challenges in the reconstruction and upgrading of the global value chain. Based on the dynamic capability theory and the collaborative innovation theory, this study constructs a theoretical framework of "digital transformation-green innovation-global value chain upgrading" to explore the impact of the synergy between digital transformation and green innovation on improving the position of Chinese construction machinery companies in the global value chain. This study uses a multi-source data fusion method, combined with patent data, financial statements and questionnaires, to construct an unbalanced panel data set of 189 listed construction machinery companies in China from 2010 to 2022, and uses econometric methods such as dynamic panel modeling, threshold regression and machine learning to analyze. The study finds that: (1) The impact of digital transformation on the global value chain upgrading of construction machinery companies presents a nonlinear "U-shaped" curve relationship; (2) Green innovation plays a positive regulatory role in the relationship between digital transformation and value chain upgrading; (3) There is a significant synergy between digital transformation and green innovation ; (4) The quality of the institutional environment has an important impact on the synergy, and a high-quality institutional environment enhances the synergy; (5) Enterprise heterogeneity significantly moderates the impact of synergy on value chain upgrading. The study expands the theory of global value chains, enriches the theory of collaborative innovation, provides a new theoretical perspective for the integration of digital economy and green development, and provides practical guidance for enterprises and governments to formulate relevant strategies and policies. Future research can further explore the cross-national comparison and long-term dynamic evolution of synergy effects.Digital transformation

Does intellectual property rights protection help reduce carbon emissions?

Our study examines the relationship between intellectual property rights protection (IPRP) and carbon emissions (CE) using an unbalanced panel data set from 116 countries spanning 2008–2020. The analysis reveals a positive relationship between IPRP and CE. Mechanism tests and nonlinear analysis further elucidate this relationship. The mediation effect results indicated that IPRP indirectly fostered CE growth by inhibiting energy structure’s improvement, demonstrating that IPRP exacerbated the dependence on traditional high-carbon energy sources, hindering the transition to cleaner, more efficient energy systems. The analysis also revealed that IPRP indirectly promoted the increase of CE by promoting technological progress and economic growth. The moderation effect results suggest that political stability could mitigate the positive impact of IPRP on CE. Furthermore, the analysis reveals an inverted U-shaped relationship between IPRP and CE, indicating that while IPRP promotes an increase in CE in the initial stages, its intensification suppresses CE growth beyond a turning point. Hence, our study provides new theoretical and empirical evidence to understand the complex relationship between IPRP and CE. It also offers policy recommendations for effectively integrating global carbon reduction efforts with intellectual property policies.

Board gender equality and ESG performance. Evidence from European banking sector

PurposeThe purpose of this paper is to investigate the relationship between board gender equality and environmental, social and governance (ESG) performance in the European banking sector. The study examines whether and how the presence of women on the board of directors (BoD) influences ESG dimensions.Design/methodology/approachThe authors analyzed a sample of 72 European Union banks for the period 2015–2021 and developed an econometric model applying unbalanced panel data regression with firm fixed effects and controls per year. To test the research hypotheses, the authors considered gender equality in terms of female participation on the BoD and measured ESG dimensions by using the ESG score provided by Refinitiv.FindingsThe findings suggest a significant positive relationship between the number of women on BoD and the ESG performance of European banks only up to a certain threshold of female directors (at least three women). The study also explores how the proportion of women on BoD influences the individual ESG pillars. The results show that the percentage of female directors has a positive and statistically significant impact on the social dimension of the ESG framework.Research limitations/implicationsThe investigation is highly relevant to investors considering ESG issues in their decision-making process. The overall findings support policymakers and regulators on how to improve ESG performance through the design and the application of corporate governance (CG) mechanisms. From a managerial perspective, the study suggests that managers and CEOs should focus their efforts on establishing the right gender combination of directors on bank BoDs.Originality/valueThis paper offers an in-depth examination of the CG practices of banks, and it attempts to bridge the gap in prior literature on the determinants of ESG issues in the European banking industry. To the best of the authors’ knowledge, this study is the first that investigates the relationship between the representation of women on BoDs and the ESG dimensions measured by the Refinitiv Eikon score. The use of critical mass theory adds a fresh perspective to the literature on ESG in Europe since the influence of board gender diversity on ESG performance of the European banks is still unaccounted for. This study addresses this pressing research issue drawing on resource dependence, agency and legitimacy theories.

Does Green Finance Development Enhance the Sustainability Performance of China’s Energy Companies?

The achievement of China’s “dual-carbon” standard has been devoted to the green transformation and the sustainable growth of energy firms, both of which can be financed by the growth of green financing. This study aims to investigate how the development level of green finance influences the sustainable development performance of listed energy companies in China. It seeks to delve into the underlying mechanisms connecting green finance with financing constraints and, subsequently, with sustainability performance, as well as exploring the relationship between green finance and green total factor productivity in relation to sustainability performance. Additionally, this study will provide strategies and recommendations to enhance the sustainable development capabilities of energy enterprises. This study empirically evaluates the four aspects of sustainable development performance: economic, social, environmental, and innovative performance—as well as its mechanism of action using the fixed-effects pattern with two ways and the mediated-effects pattern using unbalanced panel data from Chinese-listed energy firms spanning from 2011 to 2020. The study discovered that (1) energy firms’ performance in sustainable development is greatly enhanced by the progression of green finance; (2) the advancement of green finance effectively boosts the sustainable development performance of energy companies by reducing financing constraints and enhancing green total factor productivity; (3) a more distinct relationship is evident between the extent of green financing development and the performance of sustainable development within state-owned enterprises. While green finance development has a stronger role in innovative performance for larger energy firms, it has a noticeable proactive impact on the economic, social, and environmental performance of smaller energy enterprises. Based on the study’s findings, this paper presents recommendations for the enhancement of green financing policies and the sustainable enhancement of energy enterprises in China.

Economic growth, foreign direct investment and corruption nexus in sub-Saharan African countries: moderation model

This study aligns with Sustainable Development Goal 8 which borders on “economic growth by ensuring FDI inflows continue to increase so as to spur sustained economic growth”. It contributes to the economic growth literature by evaluating the role of FDI inflows and corruption on economic growth. The Sub-Saharan African region has witnessed an increase in FDI inflows for the last three decades. However, economic growth has been reducing. For example, the region witnessed a contraction in economic growth to 2.7 percent in 2022 down from 4.4 percent of 2021. The literature indicates that corruption can impede FDI inflows from translating to high economic growth. Many studies have examined the role of FDI inflows in economic growth but have not studied the moderating effect of corruption thus creating a gap for this study. To achieve the objective, the study uses the Fixed Effects Panel data approach on unbalanced panel data for 46 sub-Saharan African countries from 1998 to 2021 to interrogate the nexus. The results revealed a positive relationship between FDI inflows and economic growth. The findings align to the endogenous growth model that explains the link between foreign direct investment and economic growth. However, corruption was found to reduce the effectiveness of FDI inflows in realizing economic growth. The study therefore recommendsthat the governments of the Sub-Saharan Africa countries need to address corruption so as to achieve the desired economic growth. They should implement measures focusing on improving institutional quality to control corruption. In addition, the policy makers should relook at anti-corruption initiatives aimed at reducing poor governance. For instance, financing anti-corruption agencies and legislating their independence to ensure corruption is reduced.

Dynamics of Bank Profitability and Growth in West African Economic and Monetary Union (WAEMU) Countries

The banking sector is vital to economic activity when it develops. Its development depends on the ability of banks to generate sufficient profits to meet their commitments. In this context, we set ourselves the objective of analyzing the effect of bank profitability on economic growth. The study covers the period from 1996 to 2023, and covers 7 WAEMU countries except Guinea-Bissau, for lack of data. Methodologically, we apply Bruno's (2005) Least Square Dummy Variable (LSDVC) bias correction approach to the dynamic unbalanced panel data model. The results indicate that bank profitability has a positive influence on economic growth in the WAEMU region, whatever the profitability index used. Inflation,Political stability and investment are not unrelated to economic growth in the union. It follows from these results that the union's authorities need to strengthen supervision of the banking sector to ensure that it remains profitable.

Unveiling the Nexus: Analyzing foreign direct investment and energy consumption in shaping carbon footprints across Africa’s leading CO2-emitting countries

Carbon emissions have become a pressing global concern because of its contribution to climate change and environmental degradation. Given the urgency to tackle climate change, especially by reducing carbon emissions, this study focuses on Africa’s leading CO2 emitters from 2000 to 2020. The aims of the study are; to examine whether there is evidence of an energy-Kuznets Curve among the leading CO2 emitters in Africa, to examine whether there is evidence of an FDI-Kuznets Curve among the leading CO2 emitters in Africa, and to Identify the turning points. The study employs an innovative analysis of unbalanced panel data utilizing sophisticated econometric techniques, the contemporaneous correlation methodology, which are; the feasible generalized least squares (FGLS), and the panel-corrected standard errors (PCSE) to uncover insights. The results reveal consistency across all employed techniques. The study confirms the existence of an Energy-Kuznets Curve among the leading CO2 emitters in Africa; it also finds evidence of a U-shaped relationship between foreign direct investment and carbon emissions among the leading CO2 emitters in Africa; finally, it also identifies crucial turning points at 2760.12kg and 2886.29kg of oil equivalent per capita for energy use and 6.89% and 6.17% for FDI inflow, respectively. By investigating the factors influencing carbon emissions and evaluating their impacts, our study offers valuable insights for policymakers. These findings can inform the development of targeted interventions to curb emissions intensity, enhance energy efficiency, and foster the adoption of renewable energy sources.