Variable definition
| Variables | Acronym | Variable measurement |
|---|---|---|
| Dependent variables | ||
| Environment | E | Hua Zheng environment rating for each company |
| Social scores | S | Hua Zheng social rating for each company |
| Governance scores | G | Hua Zheng governance rating for each company |
| Independent variable | ||
| Family control | Fam | The proportion of control rights held by the controlling family |
| Moderator variable | ||
| Institutional ownership | Investor | The percentage of outstanding shares held by institutional investors |
| Instrumental variables | ||
| General manager | GM | A binary variable equal to 1 if the firm’s general manager is a member of the controlling family, and 0 otherwise. |
| Control variables | ||
| Firm size | Fsize | The natural logarithm of total assets, scaled to billions of yuan |
| Firm age | Firm age | The number of years since the firm’s establishment |
| Return on equity | ROE | Net income / shareholders’ equity |
| Leverage rate | Leverage | The ratio of total debt to total assets |
| Book-to-market ratio | BM | Book value / total market value |
| Management fee | Mfee | Management expenses/main business income |
| Audit opinion | Opinion | A binary variable equal to 1 if the firm receives a standard unqualified audit opinion, and 0 otherwise |
| TOP10 holdings | Top 10 | The proportion of shares held by the ten largest shareholders |
| Variables | Acronym | Variable measurement |
|---|---|---|
| Environment | E | Hua Zheng environment rating for each company |
| Social scores | S | Hua Zheng social rating for each company |
| Governance scores | G | Hua Zheng governance rating for each company |
| Family control | Fam | The proportion of control rights held by the controlling family |
| Institutional ownership | Investor | The percentage of outstanding shares held by institutional investors |
| General manager | A binary variable equal to 1 if the firm’s general manager is a member of the controlling family, and 0 otherwise. | |
| Firm size | Fsize | The natural logarithm of total assets, scaled to billions of yuan |
| Firm age | Firm age | The number of years since the firm’s establishment |
| Return on equity | Net income / shareholders’ equity | |
| Leverage rate | Leverage | The ratio of total debt to total assets |
| Book-to-market ratio | Book value / total market value | |
| Management fee | Mfee | Management expenses/main business income |
| Audit opinion | Opinion | A binary variable equal to 1 if the firm receives a standard unqualified audit opinion, and 0 otherwise |
| TOP10 holdings | Top 10 | The proportion of shares held by the ten largest shareholders |
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