Dear All!


I am conducting a cross-country study exploring the relationship between ESG disclosure and country and corporate level governance. I use random slope mixed-effects ML regression model. My data set consists of 52,022 observations over 10 year time period (2011-2020) from 6237 firms and 66 countries.

ESG disclosure (esg_dis - explained variable) has a clear positive trend. One of the main explanatory variables, level of civil liberties (cl) in a country has been decreasing over the analyzed time period.

The relationship I get from my analysis is negative. Although this can be explained by the theory, most of the previous research shows positive relationship.

I did include year dummies in my model, but is it enough to control for these time trends?

Code:
mixed esg_dis cl esg_bonus brd_size ind_dir wmn_pct ceo_duality roa ln_assets debt_equity crss_lst unemployment i.common mandatory_esg i.year i.ind || country: cl || id:
How can I control for the time trend in such situation?

Any advice would be highly appreciated
Many thanks!