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This paper proposes a new class of estimators for the autoregressive coefficient of a dynamic panel data model with random individual effects and nonstationary initial condition. The new estimators we introduce are weighted averages of the well-known first difference (FD) GMM/IV estimator and the pooled ordinary least squares (POLS) estimator. The proposed procedure seeks to exploit the differing strengths of the FD GMM/IV estimator relative to the pooled OLS estimator. In particular, the latter is inconsistent in the stationary case but is consistent and asymptotically normal with a faster rate of convergence than the former when the underlying panel autoregressive process has a unit root. By averaging the two estimators in an appropriate way, we are able to construct a class of estimators which are consistent and asymptotically standard normal, when suitably standardized, in both the stationary and the unit root case. The results of our simulation study also show that our proposed estimator has favorable finite sample properties when compared to a number of existing estimators.

Because of growing energy consumption and increasing absolute CO₂ emissions, the recent calibrations about the environmental sustainability across the globe have mandated to achieve the minimal energy consumption through employing energy-efficient technology. This study aims to estimate linkage between simple measure of energy efficiency indicator that is reciprocal of energy intensity and total factor productivity (TFP) in case of Indian paper industry for 21 major states. In addition, the study incorporates the other control variables like labour productivity, capital utilization and structure of paper industry to scrutinize their likely impact on energy efficiency performance of the industry.

To derive the plausible estimates of TFP, the study applies the much celebrated Levinsohn and Petrin (2003) methodology. Using the regional level data for the period 2001-2013, the study employs instrumental variable-generalized method of moments (GMM-IV) technique to examine the nature of relationship among the variables involved in the analysis.

An elementary examination of energy intensity shows that not all states are equally energy intensive. States like Goa, Rajasthan, Jharkhand and Tamil Nadu are less energy intensive, whereas Uttar Pradesh, Kerala, Chhattisgarh, Assam and Punjab are most energy-intensive states on the basis of their state averages over the whole study period. The results estimated through GMM-IV show that increasing level of TFP is associated with lower level of energy per unit of output. Along this better skills and capacity utilization are also found to have positive impact on energy efficiency performance of industry. However, the potential heterogeneity within the structure of industry itself is found responsible for its higher energy intensity.

States should ensure and undertake substantial investment projects in the research and development of energy-efficient technology and that targeted allocations could be reinforced for more fruitful results. Factors aiming at improving the labour productivity should be given extra emphasis together with capital deepening and widening, needed for energy conservation and environmental sustainability. Given the dependence of structure of paper industry on the multitude of factors like regional inequality, economic growth, industrial structure and the resource endowment together with the issues of fragmented sizes, poor infrastructure and availability and affordability of raw materials etc., states should actively promote the coordination and cooperation among themselves to reap the benefits of technological advancements through technological spill overs. In addition, owing to their respective state autonomies, state governments should set their own energy saving targets by taking into account the respective potentials and opportunities for the different industries. Despite the requirement of energy-efficient innovations, however, the cons of technological advancements and the legal frameworks on the employment structure and distributional status should be taken care of before their adoption and execution.

To the best of our knowledge, this is the first study that empirically examines the linkage between energy efficiency and TFP in case of Indian paper industry. The application of improved methods like Levinsohn and Petrin (2003) to derive the TFP measure and the use of GMM-IV to account for potential econometric problems like that of endogeneity will again add to the novelty of study.

This paper aims to examine the relationship between terrorism and innovation and the moderating role of venture capital.

The paper has used panel data from 140 countries covering the period of 2007–2016 and has analysed the data by using generalised method of moments instrumental variables (GMM-IV) estimation method to control for unobserved endogeneity among the variables.

The authors find that terrorism has negative impact on innovation. Interesting results emerge when we separated the developed countries from others. The results show that the impact of terrorism on innovation is lower in developed countries. This is due to the fact that strong institutional settings in developed countries make the investors confident by providing support and incentives. Better institutional settings in developed countries also help to reduce uncertainty, which maximise innovation and minimise terrorism risk. The authors also find that venture capital positively moderates the terrorism and innovation relationship. This implies that by providing sufficient fund for technological development, venture capital may help to reduce terrorism risk.

These results may guide the policy makers to find a business solution instead of lengthy political solution to mitigate terrorism risk in emerging countries. Overall, this paper will provide the basis for improving the counter-terrorism approaches from an innovation perspective.

The paper has used terrorism and venture capital data from 140 countries and finds interesting results that may help the policy makers to reduce the effect and intensity of terrorism in emerging countries.

The purpose of this paper is to investigate the impact of bank concentration on firm financial constraints to perform investment across two types of financial constraints firms.

The authors analyse this relationship by estimating the investment‐cash flow sensitivity across groups of firms classified according to debt maturity structure model. The firms were classified as short‐term and long‐term debt dependent firms. Empirically the authors analyze a sample that consists of the most recent dataset (over 2001‐2009) of UK firms that engage in foreign direct investment by using fixed‐effects and GMM‐IV estimation techniques.

Bank concentration was found to relax financial constraints on firm level investment. Results indicate that higher level financial constraints are associated with short‐term debt dependent firms that exhibit high level of investment‐cash flow sensitivity. Further, it was found that bank concentration is associated with reduction in financial constraints on firm investment and this effect is stronger for short‐term debt dependent firms.

Unlike previous studies, the paper investigates the bank concentration effects on UK foreign direct investing firms that are uniquely classified; based on distinctive dimension of financial frictions in capital market. Estimated results ascertain that information‐based hypothesis is pertinent to the UK capital market.

This study aims to analyze how cultural variations impact the relationship between long-term debt use and managerial overconfidence. Investigate into how the relationship between growth prospects and the utilization of long-term debt is moderated by managerial overconfidence. In addition, the research explores the moderating effect of managerial overconfidence on cash flow levels.

The study used long-term debt as the dependent variable and used generalized method of moments–instrumental variables regression analysis to examine data from 356 firms across 11 Middle East and North Africa (MENA) countries and 5 industries between 2013 and 2021.

CEO overconfidence moderately boosts the link between long-term debt maturity and growth potential, particularly for firms with limited internal funding. Cultural factors, such as masculinity and uncertainty avoidance, play a significant role in moderating the relationship between managerial overconfidence and debt maturity choices.

To understand the impact of managerial overconfidence on a company’s debt maturity decision, it is essential for boards and shareholders to consider and monitor the CEO’s behavioral traits, particularly for growing companies. Regulators and policymakers must also be wary of the risk of internal control weakening due to overconfident managers, especially in MENA markets.

The authors’ contribution to the literature lies in exploring how managerial overconfidence moderates the agency conflict between shareholders and debtholders in MENA region firms, which has received minimal attention in previous studies. This study expands the knowledge of the impact of managerial overconfidence on emerging economies and provides evidence that national culture plays a vital role in determining debt financing decisions.

This paper aims to find alternative explanations for the use of long-term debt in the US restaurant industry from a behavioral perspective. The three-fold purpose of the present study is to examine the impact of CEO overconfidence on the use of long-term debt; explore how CEO overconfidence moderates the relationship between growth opportunities and long-term debt; and analyze the moderating role of CEO overconfidence based on cash flow levels in the context of the restaurant industry.

Using a sample of publicly traded US restaurant firms between 1992 and 2015, this study used generalized methods of moments with instrumental variable technique to analyze the panel data.

The findings of this study highlight the importance of considering behavioral traits of CEOs, such as overconfidence to better understand the US restaurant firms’ financing behaviors. This study found that overconfident CEOs tend to use more long-term debt when firms have greater growth opportunities and low cash flow.

Given that psychological and behavioral features of CEOs are critical in understanding the variations in corporate financing decisions and capital structure, shareholders and boards of directors of growth-seeking restaurant firms should incorporate the behavioral aspects of overconfident CEOs in the design of long-term debt contracts to mitigate liquidation risk while developing compensation practices that encourage overconfident CEOs to finance growth.

Despite its heavy reliance on long-term debt in the US hospitality industry, prior studies provided mixed findings for the determinants of long-term debt. This study makes a contribution to the literature by offering alternative approaches to examining long-term debt decisions among US restaurant firms.

The purpose of this study is to identify the effects of MNCs measured by the foreign direct investment (FDI) inflows on the promotion of renewable energy consumption and non-renewable energy in Bangladesh. It is an emergency issue these days and makes some policy suggestions.

Based on the literature review, the study sets a time series models to empirically test FDI degrades the environmental quality in Bangladesh, using the parametric (GMM, IV estimations) and non-parametric approaches (quantile regression).

The main findings drawn from the empirical analysis are as follows. First, the FDI inflows lead to more CO₂ emissions in the Bangladeshi economy. In other words, the MNCs promote the usages of non-renewable energy which causes an increase in pollution. Second, the FDI inwards discourage renewable energy consumption and in terms of magnitude, the negative impacts of FDI on renewable energy are higher than the positive effect of FDI on CO₂ emissions. This makes the situation worse.

This study is limited to Bangladesh and explores the total impact of FDI on the environment. For further investigation, it would be better to do a detailed investigation on the FDI-renewable and nonrenewable energy relationship. For instance, one could test which type of FDI promotes green energy consumption and which one is dirtier. So, the sectorial FDI effects on pollution.

Most past studies parametric techniques and did not compare the effects of FDI on renewable and non-renewable energy consumption, Unlike the previous empirical studies, this paper uses GMM and IV estimations for the parametric approach and quantile regression (QR) as a robustness check. Also, it is the first study that approves the crowding-out effect of non-renewable using the FDI channel.

This paper investigates how relative environmental regulation influences the flow of foreign direct investment (FDI), and thereby assesses the pollution haven hypothesis (PHH). In this field, conflicting results exist, partly due to the mere consideration of absolute environmental regulation or the inadequate consideration of endogeneity. Concerning these, we study China’s inward FDI from 26 developed countries and 12 developing countries over 1996–2009, and collect four different environmental regulation indicators at relative values of CO₂, SO₂, PM10, and an environmental regulation index. Using an instrumental variable approach, we find strong PHH evidence no matter for the subsample of FDI from developed countries or the one from developing countries. Moreover, we show how such results can be masked if failing to consider the endogeneity.

The purpose of this paper is to examine the impact of the two diversification strategies on firms' propensity to save cash out of cash flow.

The author examines the quarterly data of Compustat's active and research firms from the first quarter of 1999 to the last quarter of 2005, with a sample size of more than 79,000 firm quarters. A two‐step GMM Instrumental Variable regression of change in cash holdings, on variables that measure the degree of industrial as well as international diversification strategies, is employed to investigate whether each diversification strategy alleviates or exacerbates firm's propensity to save cash out of its cash flows.

Evidence is found that industrial diversification mitigates the propensity of firms to save cash out of their cash flows. When the sample is partitioned into financially constrained and financially non‐constrained firms, industrial diversification reduces propensity of firms to save cash out of cash flows for financially constrained firms but not for financially non‐constrained firms. On the other hand, the results do not indicate any impact of international diversification on the sensitivity of cash to cash flows.

The paper tests, empirically, whether international and industrial diversification strategies affect the propensity of firms to save cash out of their cash flow.

This paper is concerned with estimation and inference for difference-in-difference regressions with errors that exhibit high serial dependence, including near unit roots, unit roots, and linear trends. We propose a couple of solutions based on a parametric formulation of the error covariance. First stage estimates of autoregressive structures are obtained by using the Han, Phillips, and Sul (2011, 2013) X-differencing transformation. The X-differencing method is simple to implement and is unbiased in large N settings. Compared to similar parametric methods, the approach is computationally simple and requires fewer restrictions on the permissible parameter space of the error process. Simulations suggest that our methods perform well in the finite sample across a wide range of panel dimensions and dependence structures.