Succession in family business and environmental investment: the moderating role of external environment

Figures & data

Table 1. Definitions of variables.

Variables	Definition
EI	Environmental investment/average total assets
Suc	Dummy variable that equals 1 if the heir (including the founder’s child, daughter-in-law or son-in-law) is the chairman or CEO of the company and 0 otherwise
Oversea	Dummy variable that equals 1 if the successor of a family business has overseas experience (study abroad or work) and 0 otherwise
ER	Investment in regional pollution control/Gross regional product
HHI	1- Herfindahl Index
Size	Natural logarithm of the company's total assets
Age	Natural logarithm of the difference between the observation year and the company's listing year
Lev	Total liabilities of the company in the current year/the book value of the company in the current year
ROA	Net profit/average net assets
Cash	Monetary fund balance/average total assets
Male	Dummy variable that equals 1if the actual controller of the enterprise is male and 0 otherwise.
Edu	The educational background of the actual controller of the enterprise is scored 1–6 according to elementary school, junior high school, high school (or technical secondary school), junior college, university undergraduate, postgraduate and above
Pc	Dummy variable that equals 1if the actual controller of a company acts as a deputy to the National People's Congress or a member of the Chinese People's Political Consultative Conference and 0 otherwise
Inde	The ratio of the number of independent directors to the number of board members
FamHold	The sum of the shareholding ratios of all family members
Year	The data year interval is 8 years, so 7 dummy variables are set.
Province	China has 31 provinces, so 30 dummy variables are set.
Industry	Adopting the first-level industry classification of the China Securities Regulatory Commission, this article involves 18 industries, so 17 dummy variables are set.

Source: calculated by author’s formulas.

Table 2. Descriptive statistics.

Variables	N	Mean	Min	Std.	Median	Max
EI	2676	0.012	0.000	0.027	0.006	0.162
Suc	2676	0.452	0.000	0.468	0.000	1.000
Oversea	2676	0.382	0.000	0.318	0.000	1.000
ER	2676	0.016	0.004	0.008	0.020	0.045
HHI	2676	0.104	0.032	0.088	0.062	0.404
Size	2676	18.531	15.284	7.682	18.429	22.647
Age	2676	8.153	1.000	5.143	6.000	42.000
Lev	2676	0.396	0.068	0.213	0.425	0.863
ROA	2676	0.047	–0.168	0.019	0.044	0.183
Cash	2676	0.094	0.008	0.062	0.097	0.212
Male	2676	0.824	0.000	0.286	1.000	1.000
Edu	2676	4.215	1.000	1.213	4.000	6.000
Pc	2676	0.682	0.000	0.475	1.000	1.000
Inde	2676	0.367	0.200	0.052	0.333	0.667
FamHold	2676	35.257	12.230	3.984	32.286	76.380

Notes: The values in parentheses are the T-values.

* Significant at the 0.10 level,

** significant at the 0.05 level, and

*** significant at the 0.01 level.

Source: calculated by author’s formulas.

Table 3. Tobit regression results of succession and environmental investment.

	Explained variable: EI
	Full sample group		Oversea = 0	Oversea = 1
Explanatory variable	Model 1	Model 2	Model 3	Model 4
Constant	0.0306*** (3.846)	0.0245*** (3.944)	0.02853*** （3.752)	0.0236*** （4.110)
Suc		0.0145*** (2.842)	0.0117* （1.828)	0.0175*** （3.174)
Size	–0.0016*** (–3.782)	–0.0018*** (–3.810)	–0.0016*** （–3.703)	–0.0019*** （–3.724)
Age	–0.0008*** (–2.647)	–0.0009*** (–2.704)	–0.0006** (–2.438)	–0.0011*** (–2.964)
Lev	0.0124 (0.689)	0.0118 (0.657)	0.0121 (0.633)	0.0116 (0.710)
ROA	–0.0185 (–1.385)	–0.0172 (–1.296)	–0.0188 (–1.348)	–0.0170 (–1.116)
Cash	–0.0012 (–1.428)	–0.0011 (–1.485)	–0.0014 (–1.496)	–0.0009 (–1.477)
Male	0.0072* (1.752)	0.0068 (1.577)	0.0075* (1.683)	0.0062 (1.436)
Edu	0.0053* (1.824)	0.0056* (1.773)	0.0058* (1.792)	0.0055* (1.764)
Pc	–0.0012*** (–2.816)	–0.0013** (–2.468)	–0.0012*** (–2.751)	–0.0011** (–2.447)
Inde	0.0102*** (2.927)	0.0099*** (2.911)	0.0104*** (3.089)	0.0097*** (2.887)
FamHold	–0.0005 (–1.248)	–0.0004 (–1.125)	–0.007 (–1.253)	–0.0003 (–1.056)
Year	Yes	Yes	Yes	Yes
Province	Yes	Yes	Yes	Yes
Industry	Yes	Yes	Yes	Yes
N	2676	2676	1258	1022
Pseudo R^2	0.1872	0.2105	0.2033	0.2227

Notes: The values in parentheses are the T-values.

* Significant at the 0.1 level,

** significant at the 0.05 level, and

*** significant at the 0.01 level.

Source: calculated by author’s formulas.

Table 4. Tobit regression results of the moderating effect of the external environment.

	Explained variable: EI
Explanatory variable	Model 1	Model 2	Model 3
Constant	0.0296*** (3.557)	0.0273*** (3.672)	0.0301*** (3.584)
Suc	0.0138*** (2.827)	0.0127*** (2.912)	0.0135*** (2.875)
ER	0.0148*** (2.732)		0.0152*** (2.718)
Suc × ER	0.0275*** (2.788)		0.0265*** (2.745)
HHI		–0.0094* (–1.822)	–0.0086 (–1.612)
Suc × HHI		–0.0188** (–2.634)	–0.0184** (–2.457)
Size	–0.0017*** (–3.685)	–0.0019*** (–3.537)	–0.0016*** (–3.662)
Age	–0.0011*** (–2.711)	–0.0008*** (–2.685)	–0.0009** (–2.552)
Lev	0.0116 (0.723)	0.0120 (0.673)	0.0115 (0.710)
ROA	–0.0173 (–1.248)	–0.0175 (–1.125)	–0.0168 (–1.178)
Cash	–0.0009 (–1.437)	–0.0013 (–1.511)	–0.0011 (–1.482)
Male	0.0066* (1.692)	0.0071 (1.523)	0.0069 (1.664)
Edu	0.0052* (1.755)	0.0054* (1.737)	0.0055* (1.812)
Pc	–0.0012** (–2.349)	–0.0014** (–2.434)	–0.0014** (–2.359)
Inde	0.0097*** (2.931)	0.0103*** (2.855)	0.0101*** (2.822)
FamHold	–0.0005 (–1.084)	–0.0004 (–1.149)	–0.0006 (–1.117)
Year	Yes	Yes	Yes
Province	No	Yes	No
Industry	Yes	No	No
N	2676	2676	2676
Pseudo R^2	0.2261	0.2228	0.2324

Notes: The values in parentheses are the T-values.

* Significant at the 0.1 level,

** significant at the 0.05 level, and

*** significant at the 0.01 level.

Source: calculated by author’s formulas.

Table 5. Tobit regression results of the subsample of firms with succession.

	Explained variable: EI
Explanatory variable	Model 1	Model 2	Model 3
Constant	0.03161*** (3.557)	0.03434*** (3.672)	0.03758*** (3.584)
Oversea	0.0085*** (2.946)
ER		0.0328*** (2.814)
HHI			–0.0262*** (–2.688)
Control variables	Yes	Yes	Yes
Year	Yes	Yes	Yes
Province	Yes	No	Yes
Industry	Yes	Yes	No
N	1210	1210	1210
Pseudo R^2	0.2173	0.2244	0.2136

Notes: The values in parentheses are the T-values.

* Significant at the 0.1 level,

** significant at the 0.05 level, and

*** significant at the 0.01 level.

Source: calculated by author’s formulas.

Data availability statement

The data that support the findings of this study are available from the corresponding author upon reasonable request.