Table 2 Variable definitions and...

Table 2

Variable definitions and measurements

Variable name	Role in model	Description/Measurement	Source	Expected sign	References
Tobin's Q	Dependent	Market-based valuation proxy: ratio of market value of equity plus book value of debt to total assets (empirical approximation of the theoretical Q)	LSEG Workspace	+	Yu and Xiao (2022), Rahat and Nguyen (2024)
Market-to-Book ratio	Dependent (robustness)	Equity valuation proxy: market value of equity divided by book value of equity	LSEG Workspace	+/–	Yu and Xiao (2022), Abdi et al. (2020)
ESG Score (overall)	Independent	Composite percentile score (0–100) aggregating environmental, social, and governance indicators based on publicly disclosed information	LSEG Workspace	+	Giannopoulos et al. (2022), Sinha Ray and Goel (2023)
Environmental Score	Independent	Percentile score capturing environmental performance (e.g. emissions, resource use, environmental innovation and disclosure)	LSEG Workspace	+	Abubakr et al. (2025), Buallay (2019)
Social Score	Independent	Percentile score capturing social performance (e.g. workforce practices, human rights, community relations, diversity policies)	LSEG Workspace	+	Gonçalves et al. (2023), Buallay et al. (2020)
Governance Score	Independent	Percentile score capturing governance structure and processes (shareholder rights, board structure, transparency and disclosure)	LSEG Workspace	±	Dkhili (2023), Makpotche et al. (2024)
Executive gender diversity	Moderating	Percentage of executive positions held by women (number of female executives ÷ total executives × 100). Distinct from board-level diversity	LSEG Workspace	±	Al-Hiyari (2024)
Sensitive sector	Contextual moderator	Indicator equal to 1 for TRBC “sensitive” industries (energy, basic materials, industrials, utilities); 0 for non-sensitive sectors	TRBC/LSEG	±	Qureshi et al. (2020)
Firm size	Control	Natural logarithm of total assets (scale and visibility proxy)	LSEG Workspace	–	Giannopoulos et al. (2022), Brahma et al. (2021)
Profitability (ROA)	Control	Return on assets: net income divided by total assets	LSEG Workspace	+	Rahman et al. (2023)
Leverage	Control	Debt-to-capital ratio (total debt ÷ (debt + equity))	LSEG Workspace	±	Giannopoulos et al. (2022), Brahma et al. (2021)
Price volatility	Control	Annualised standard deviation of stock returns (firm-specific risk)	LSEG Workspace	–	Zhou and Zhou (2021)
Board gender diversity	Control	Proportion of women on the board of directors	LSEG Workspace	+	Kampoowale et al. (2024), Arvanitis et al. (2022)
Board size	Control	Number of directors serving on the board at year-end	LSEG Workspace	±	Ramadan and Hassan (2022), Brahma et al. (2021)

Variable name	Role in model	Description/Measurement	Source	Expected sign	References
Tobin's Q	Dependent	Market-based valuation proxy: ratio of market value of equity plus book value of debt to total assets (empirical approximation of the theoretical Q)	LSEG Workspace	+	Yu and Xiao (2022), Rahat and Nguyen (2024)
Market-to-Book ratio	Dependent (robustness)	Equity valuation proxy: market value of equity divided by book value of equity	LSEG Workspace	+/–	Yu and Xiao (2022), Abdi et al. (2020)
ESG Score (overall)	Independent	Composite percentile score (0–100) aggregating environmental, social, and governance indicators based on publicly disclosed information	LSEG Workspace	+	Giannopoulos et al. (2022), Sinha Ray and Goel (2023)
Environmental Score	Independent	Percentile score capturing environmental performance (e.g. emissions, resource use, environmental innovation and disclosure)	LSEG Workspace	+	Abubakr et al. (2025), Buallay (2019)
Social Score	Independent	Percentile score capturing social performance (e.g. workforce practices, human rights, community relations, diversity policies)	LSEG Workspace	+	Gonçalves et al. (2023), Buallay et al. (2020)
Governance Score	Independent	Percentile score capturing governance structure and processes (shareholder rights, board structure, transparency and disclosure)	LSEG Workspace	±	Dkhili (2023), Makpotche et al. (2024)
Executive gender diversity	Moderating	Percentage of executive positions held by women (number of female executives ÷ total executives × 100). Distinct from board-level diversity	LSEG Workspace	±	Al-Hiyari (2024)
Sensitive sector	Contextual moderator	Indicator equal to 1 for TRBC “sensitive” industries (energy, basic materials, industrials, utilities); 0 for non-sensitive sectors	TRBC/LSEG	±	Qureshi et al. (2020)
Firm size	Control	Natural logarithm of total assets (scale and visibility proxy)	LSEG Workspace	–	Giannopoulos et al. (2022), Brahma et al. (2021)
Profitability (ROA)	Control	Return on assets: net income divided by total assets	LSEG Workspace	+	Rahman et al. (2023)
Leverage	Control	Debt-to-capital ratio (total debt ÷ (debt + equity))	LSEG Workspace	±	Giannopoulos et al. (2022), Brahma et al. (2021)
Price volatility	Control	Annualised standard deviation of stock returns (firm-specific risk)	LSEG Workspace	–	Zhou and Zhou (2021)
Board gender diversity	Control	Proportion of women on the board of directors	LSEG Workspace	+	Kampoowale et al. (2024), Arvanitis et al. (2022)
Board size	Control	Number of directors serving on the board at year-end	LSEG Workspace	±	Ramadan and Hassan (2022), Brahma et al. (2021)

Note(s): All variables are derived from LSEG Workspace (formerly Refinitiv Eikon/Datastream). Sensitive sector classification follows the TRBC industry taxonomy, with energy, basic materials, industrials, and utilities coded as sensitive

Source(s): Created by authors

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