Table 5. Robustness checks (2) Model (1)...

Table 5.

Robustness checks (2)

	Model (1)	Model (2)	Model (3)	Model (4)
Dependent variable	Composite measure of ESG	Environmental performance	Social performance	Governance performance
Independent variables
Formal institution	0.8592 (2.2983)	6.2952* (2.7320)	5.2215† (2.8522)	−8.2215*** (2.3887)
Informal institution	4.6604*** (0.8209)	2.9367** (1.0255)	2.9548** (1.0399)	8.5205*** (0.7905)
Financial market institution	2.8320*** (0.8165)	1.6347 (1.0483)	0.8336 (1.0458)	6.1062*** (0.7575)
Country-level control variables
GDP growth	−0.0037 (0.1091)	−0.1185 (0.1423)	0.1028 (0.1406)	−0.0273 (0.0989)
Population (log)	−0.2044 (1.5344)	2.1053 (1.6771)	0.8134 (1.8325)	−4.2170* (1.9833)
Unemployment rate	0.3121** (0.0993)	0.6157*** (0.1277)	0.2079 (0.1273)	0.1147 (0.0916)
FDI net inflow (log)	−0.6458** (0.2109)	−0.7985** (0.2747)	−0.9217*** (0.2718)	−0.2438 (0.1915)
Size of land (log)	0.4266 (1.1280)	−1.2437 (1.2143)	0.0601 (1.3386)	2.9832* (1.4961)
Labor market efficiency	−0.3499* (0.1446)	−0.5597** (0.1890)	−0.5389** (0.1866)	0.0630 (0.1307)
Firm-level control variables
Return on assets	0.0402*** (0.0110)	0.0356* (0.0144)	0.0643*** (0.0142)	0.0205* (0.0099)
Total asset	0.0278*** (0.0007)	0.0345*** (0.0009)	0.0320*** (0.0009)	0.0169*** (0.0006)
Debt ratio	0.0168* (0.0073)	0.0429*** (0.0096)	−0.0108 (0.0095)	0.0183** (0.0066)
Foreign sales to total sales	0.0098*** (0.0014)	0.0111*** (0.0018)	0.0126*** (0.0018)	0.0058*** (0.0012)
Constant	54.4014** (18.7527)	39.7836† (20.8997)	55.4820* (22.5694)	73.9982** (23.6758)
Log of random-effects parameter	2.3432*** (0.1175)	2.4068*** (0.1290)	2.5102*** (0.1197)	2.6457*** (0.1081)
Number of observations	24,535	24,535	24,535	24,535
Log-likelihood	−109,109.78	−115,744.86	−115,388.71	−106,530.10
AIC	218,293.56	231,563.73	230,851.43	213,134.20

	Model (1)	Model (2)	Model (3)	Model (4)
Dependent variable	Composite measure of ESG	Environmental performance	Social performance	Governance performance
Independent variables
Formal institution	0.8592 (2.2983)	6.2952* (2.7320)	5.2215† (2.8522)	−8.2215*** (2.3887)
Informal institution	4.6604*** (0.8209)	2.9367** (1.0255)	2.9548** (1.0399)	8.5205*** (0.7905)
Financial market institution	2.8320*** (0.8165)	1.6347 (1.0483)	0.8336 (1.0458)	6.1062*** (0.7575)
Country-level control variables
GDP growth	−0.0037 (0.1091)	−0.1185 (0.1423)	0.1028 (0.1406)	−0.0273 (0.0989)
Population (log)	−0.2044 (1.5344)	2.1053 (1.6771)	0.8134 (1.8325)	−4.2170* (1.9833)
Unemployment rate	0.3121** (0.0993)	0.6157*** (0.1277)	0.2079 (0.1273)	0.1147 (0.0916)
FDI net inflow (log)	−0.6458** (0.2109)	−0.7985** (0.2747)	−0.9217*** (0.2718)	−0.2438 (0.1915)
Size of land (log)	0.4266 (1.1280)	−1.2437 (1.2143)	0.0601 (1.3386)	2.9832* (1.4961)
Labor market efficiency	−0.3499* (0.1446)	−0.5597** (0.1890)	−0.5389** (0.1866)	0.0630 (0.1307)
Firm-level control variables
Return on assets	0.0402*** (0.0110)	0.0356* (0.0144)	0.0643*** (0.0142)	0.0205* (0.0099)
Total asset	0.0278*** (0.0007)	0.0345*** (0.0009)	0.0320*** (0.0009)	0.0169*** (0.0006)
Debt ratio	0.0168* (0.0073)	0.0429*** (0.0096)	−0.0108 (0.0095)	0.0183** (0.0066)
Foreign sales to total sales	0.0098*** (0.0014)	0.0111*** (0.0018)	0.0126*** (0.0018)	0.0058*** (0.0012)
Constant	54.4014** (18.7527)	39.7836† (20.8997)	55.4820* (22.5694)	73.9982** (23.6758)
Log of random-effects parameter	2.3432*** (0.1175)	2.4068*** (0.1290)	2.5102*** (0.1197)	2.6457*** (0.1081)
Number of observations	24,535	24,535	24,535	24,535
Log-likelihood	−109,109.78	−115,744.86	−115,388.71	−106,530.10
AIC	218,293.56	231,563.73	230,851.43	213,134.20

Note(s):

Year and industry fixed effects are included but are not reported here. Multilevel regression with random intercept modelling is used to estimate the results. Standard errors are in parentheses. ***p < 0.001, **p < 0.01, *p < 0.05, †p < 0.10. All explanatory and control variables are lagged by One year to minimize the endogeneity concern. AIC = Akaike information criterion

Source(s): Authors’ own work

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