Table 4. Merchanism analysis.
| VARIABLES | (1) | (2) | (3) | (4) | (5) | (6) |
|---|---|---|---|---|---|---|
| Subsidy | UnderInvest | ESG | ESG | ESG | ESG | |
| PT | -1.1550*** | 0.0010*** | -0.0470** | -0.0502*** | -0.0667*** | -0.0674*** |
| (-3.370) | (2.737) | (-2.549) | (-2.707) | (-3.388) | (-3.489) | |
| Subsidy | 0.0040*** | 0.0035** | ||||
| (2.664) | (2.345) | |||||
| UnderInvest | -1.6296*** | -2.1455*** | ||||
| (-5.940) | (-5.880) | |||||
| PT* Subsidy | 0.0052*** | |||||
| (2.879) | ||||||
| PT*UnderInvest | -1.1307** | |||||
| (-2.443) | ||||||
| Size | 67.8685* | -0.0019 | 0.2779 | 0.5492** | 0.2962 | 0.5464** |
| (1.726) | (-1.438) | (1.586) | (2.044) | (1.585) | (2.049) | |
| Lev | 9.2110*** | -0.0096*** | 0.0493 | 0.0715 | 0.0337 | 0.0687 |
| (4.123) | (-8.858) | (0.713) | (1.068) | (0.499) | (1.026) | |
| ROA | 17.6456*** | -0.0468*** | 3.2952*** | 3.2901*** | 3.2793*** | 3.3015*** |
| (4.756) | (-13.879) | (20.699) | (20.854) | (20.909) | (20.944) | |
| Growth | -0.3066 | 0.0017*** | -0.0699*** | -0.0686*** | -0.0700*** | -0.0683*** |
| (-1.324) | (4.795) | (-5.429) | (-5.323) | (-5.429) | (-5.305) | |
| Indep | 14.1203** | 0.0097*** | 0.0407 | 0.1082 | 0.0245 | 0.0948 |
| (2.543) | (2.976) | (0.198) | (0.522) | (0.120) | (0.459) | |
| TobinQ | -0.7475*** | 0.0017*** | -0.0962*** | -0.0965*** | -0.0954*** | -0.0965*** |
| (-5.082) | (11.064) | (-14.303) | (-14.454) | (-14.313) | (-14.427) | |
| Duality | -0.0083 | 0.0015*** | 0.0930*** | 0.0955*** | -0.1052*** | -0.1120*** |
| (-0.021) | (4.649) | (4.696) | (4.760) | (-4.651) | (-4.873) | |
| Top10 | 7.5634*** | 0.0189*** | 0.8327*** | 0.8913*** | 0.8253*** | 0.8866*** |
| (4.162) | (23.306) | (15.984) | (16.660) | (15.928) | (16.582) | |
| Age | -0.1314 | 0.0050*** | 0.0815 | 0.0894 | 0.0725 | 0.0861 |
| (-0.104) | (6.643) | (1.493) | (1.610) | (1.328) | (1.549) | |
| Per capita GDP | 0.1880*** | -0.0000 | 0.0075** | 0.0083** | 0.0077** | 0.0086** |
| (3.010) | (-0.429) | (2.111) | (2.313) | (2.170) | (2.392) | |
| Constant | -8.3555 | -0.0420*** | 4.7411*** | 4.6393*** | 5.0211*** | 4.8748*** |
| (-0.801) | (-5.940) | (8.568) | (8.261) | (9.107) | (8.681) | |
| Year & Firm | Yes | Yes | Yes | Yes | Yes | Yes |
| Observations | 30627 | 30627 | 30627 | 30627 | 30627 | 30627 |
| R2 | 0.295 | 0.082 | 0.198 | 0.193 | 0.199 | 0.193 |
| Adj-R2 | 0.293 | 0.0786 | 0.195 | 0.190 | 0.196 | 0.191 |
Note. This table reports the mechanisms of the relationship between political turnover and corporate ESG performance. Column (1) and column (3) test the mechanism by governmental subsidies while column (2) and column (4) test the mechanism by under-investment. The t values reported in parentheses are adjusted based on robust standard errors clustered by firm, where *, **, and *** denote significance levels of 0.01, 0.05, and 0.10 respectively. All variables are defined in Appendix A in S1 Table.