Table 1.

Definition of variables for FE regression and GMM analysis

VariablesTypeDescription
ROICDependentRatio of net profit plus interest × (1−tax) divided by average of total capital plus short-term debt plus long-term debt
ROEDependentRatio of net profit to shareholders’ equity
ROADependentRatio of net profit to total assets
EPSDependentProfit allocated to each shareholder
ESG scoreIndependentESG practice score collected by the Asset4 database by Thomson Reuters
Environmental score, EIndependentEP of companies obtained from Asset4
Social score, SIndependentSP of companies obtained from Asset4
Governance score, GIndependentGP of companies obtained from Asset4
Beta (systematic risk)Control variableBeta factor firm’s systematic risk
Unsystematic risk, a*Control variableTotal debt/total assets in ratio represents firm’s unsystematic risk
Firm leverage, b*Control variableTotal debt/equity in ratio represents firm’s leverage risk
Firm’s sizeControl variableNatural logarithm of total assets
**Moder_ESG_FsizeControl variableModerating between ESG score and firm size
**Moder_ENV_FsizeControl variableModerating between environment score and firm size
**Moder_SOC_FsizeControl variableModerating between social score and firm size
**Moder_GOV_FsizeControl variableModerating between governance score and firm size

Notes:

*

Both a and b represent firm leverage and unsystematic risks.

**

Moderator is the interaction of the variable’s standardized values

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