Table 4 ESG and profitability...

Table 4

ESG and profitability conditional on earnings volatility

	(1) Baseline ROA	(2) ROA + vol control	(3) ROE + vol control
E score (t−1)	0.0036**	0.0035**	0.0101**
S score (t−1)	−0.0059***	−0.0057***	−0.0120**
G score (t−1)	0.0033	0.0029	0.0039
ROA_vol3_lag		−0.1640	0.0097
Ln(Assets)	−0.0118*	−0.0160*	−0.0389*
Board size	−0.0007	−0.0011	−0.0039
State ownership	0.0001	0.0001	0.0001
Foreign ownership	0.0006**	0.0007**	0.0015**
Board independence	0.0200**	0.0173*	0.0232
Observations	647	585	585
Firms	62	62	62
R² (within)	0.0807	0.0963	0.0686
Firm and Year FE	Yes	Yes	Yes

	(1) Baseline ROA	(2) ROA + vol control	(3) ROE + vol control
E score (t−1)	0.0036**	0.0035**	0.0101**
S score (t−1)	−0.0059***	−0.0057***	−0.0120**
G score (t−1)	0.0033	0.0029	0.0039
ROA_vol3_lag		−0.1640	0.0097
Ln(Assets)	−0.0118*	−0.0160*	−0.0389*
Board size	−0.0007	−0.0011	−0.0039
State ownership	0.0001	0.0001	0.0001
Foreign ownership	0.0006**	0.0007**	0.0015**
Board independence	0.0200**	0.0173*	0.0232
Observations	647	585	585
Firms	62	62	62
R² (within)	0.0807	0.0963	0.0686
Firm and Year FE	Yes	Yes	Yes

Note(s): ***p < 0.01, **p < 0.05, *p < 0.10. Standard errors in parentheses. Column 1 replicates the baseline profitability specification from the companion paper. Columns 2 and 3 add ROA_vol3_lag as a control variable to test whether ESG predicts profitability beyond its effect on earnings risk. The minimal attenuation of ESG coefficients (2.8 per cent for E, 3.4 per cent for S) indicates that the profitability and risk channels operate largely independently

[ViewLarge]

Sharing Unavailable