Table VI Aspects of ESG and firm value...

Table VI

Aspects of ESG and firm value

	Subindices included
	OLS		RE		FE
	Separate	Together	Separate	Together	Separate	Together
	(1)	(2)	(3)	(4)	(5)	(6)
Social index
Training and development	0.154*** (6.01)	0.033 (1.00)	0.063*** (3.56)	−0.014 (−0.61)	0.036* (1.82)	−0.022 (−0.92)
Customer/Product responsibility	0.075*** (3.03)	−0.005 (−0.17)	0.085*** (4.99)	0.049*** (2.78)	0.081*** (4.41)	0.057*** (3.03)
Human rights	0.171*** (6.82)	0.110*** (4.05)	0.102*** (5.40)	0.064*** (3.24)	0.074*** (3.54)	0.045** (2.13)
Health and safety	0.092*** (3.43)	−0.044 (−1.41)	0.019 (1.06)	−0.050** (−2.55)	−0.004 (−0.22)	−0.053** (−2.56)
Employment quality	0.182*** (7.66)	0.130*** (4.89)	0.114*** (7.04)	0.089*** (5.21)	0.092*** (5.23)	0.076*** (4.19)
Diversity and opportunity	0.111*** (4.34)	−0.020 (−0.63)	0.075*** (3.94)	0.007 (0.32)	0.050** (2.31)	−0.002 (−0.07)
Community	0.116*** (4.49)	−0.002 (−0.06)	0.063*** (3.66)	0.004 (0.18)	0.048** (2.55)	0.008 (0.40)
Environmental index
Resource reduction	0.189*** (6.77)	0.191*** (4.57)	0.110*** (5.19)	0.043 (1.46)	0.081*** (3.34)	0.019 (0.64)
Product innovation	0.040 (1.41)	−0.071** (−2.22)	0.048** (2.49)	−0.019 (−0.86)	0.044** (2.08)	−0.007 (−0.29)
Emission reduction	0.126*** (4.42)	−0.085* (−1.94)	0.115*** (5.16)	0.034 (1.16)	0.103*** (4.05)	0.054* (1.76)
Corporate governance index
Shareholder rights	0.119*** (5.24)	0.087*** (3.60)	−0.005 (−0.31)	−0.016 (−1.02)	−0.036** (−2.19)	−0.042** (−2.47)
Vision and strategy	0.137*** (4.85)	−0.013 (−0.36)	0.093*** (4.49)	0.021 (0.89)	0.073*** (3.08)	0.020 (0.79)
Compensation policy	0.053** (2.44)	−0.009 (−0.40)	0.032** (2.32)	0.025* (1.77)	0.024* (1.67)	0.026* (1.78)
Board structure	0.076*** (3.33)	0.049* (1.94)	0.009 (0.57)	0.007 (0.42)	−0.004 (−0.25)	0.001 (0.04)
Board functions	0.043* (1.82)	−0.049* (−1.75)	−0.006 (−0.34)	−0.026 (−1.43)	−0.022 (−1.16)	−0.031 (−1.58)
Time dummies	Yes	Yes	Yes	Yes	Yes	Yes
Industry dummies	Yes	Yes	Yes	Yes	–	–
Country dummies	Yes	Yes	Yes	Yes	–	–
Observations	23,352	23,352	23,352	23,352	23,352	23,352
Firms	3,844	3,844	3,844	3,844	3,844	3,844
R² (range)	(0.432-0.464)	0.463	(0.402-0.414)	0.412	(0.208-0.218)	0.218

	Subindices included
	OLS		RE		FE
	Separate	Together	Separate	Together	Separate	Together
	(1)	(2)	(3)	(4)	(5)	(6)
Social index
Training and development	0.154*** (6.01)	0.033 (1.00)	0.063*** (3.56)	−0.014 (−0.61)	0.036* (1.82)	−0.022 (−0.92)
Customer/Product responsibility	0.075*** (3.03)	−0.005 (−0.17)	0.085*** (4.99)	0.049*** (2.78)	0.081*** (4.41)	0.057*** (3.03)
Human rights	0.171*** (6.82)	0.110*** (4.05)	0.102*** (5.40)	0.064*** (3.24)	0.074*** (3.54)	0.045** (2.13)
Health and safety	0.092*** (3.43)	−0.044 (−1.41)	0.019 (1.06)	−0.050** (−2.55)	−0.004 (−0.22)	−0.053** (−2.56)
Employment quality	0.182*** (7.66)	0.130*** (4.89)	0.114*** (7.04)	0.089*** (5.21)	0.092*** (5.23)	0.076*** (4.19)
Diversity and opportunity	0.111*** (4.34)	−0.020 (−0.63)	0.075*** (3.94)	0.007 (0.32)	0.050** (2.31)	−0.002 (−0.07)
Community	0.116*** (4.49)	−0.002 (−0.06)	0.063*** (3.66)	0.004 (0.18)	0.048** (2.55)	0.008 (0.40)
Environmental index
Resource reduction	0.189*** (6.77)	0.191*** (4.57)	0.110*** (5.19)	0.043 (1.46)	0.081*** (3.34)	0.019 (0.64)
Product innovation	0.040 (1.41)	−0.071** (−2.22)	0.048** (2.49)	−0.019 (−0.86)	0.044** (2.08)	−0.007 (−0.29)
Emission reduction	0.126*** (4.42)	−0.085* (−1.94)	0.115*** (5.16)	0.034 (1.16)	0.103*** (4.05)	0.054* (1.76)
Corporate governance index
Shareholder rights	0.119*** (5.24)	0.087*** (3.60)	−0.005 (−0.31)	−0.016 (−1.02)	−0.036** (−2.19)	−0.042** (−2.47)
Vision and strategy	0.137*** (4.85)	−0.013 (−0.36)	0.093*** (4.49)	0.021 (0.89)	0.073*** (3.08)	0.020 (0.79)
Compensation policy	0.053** (2.44)	−0.009 (−0.40)	0.032** (2.32)	0.025* (1.77)	0.024* (1.67)	0.026* (1.78)
Board structure	0.076*** (3.33)	0.049* (1.94)	0.009 (0.57)	0.007 (0.42)	−0.004 (−0.25)	0.001 (0.04)
Board functions	0.043* (1.82)	−0.049* (−1.75)	−0.006 (−0.34)	−0.026 (−1.43)	−0.022 (−1.16)	−0.031 (−1.58)
Time dummies	Yes	Yes	Yes	Yes	Yes	Yes
Industry dummies	Yes	Yes	Yes	Yes	–	–
Country dummies	Yes	Yes	Yes	Yes	–	–
Observations	23,352	23,352	23,352	23,352	23,352	23,352
Firms	3,844	3,844	3,844	3,844	3,844	3,844
R² (range)	(0.432-0.464)	0.463	(0.402-0.414)	0.412	(0.208-0.218)	0.218

Notes: OLS, firm random effects (RE), and firm fixed effects (FE) regressions of ln (Tobin’s q) on aspects of ESG and control variables for 2003-2016. All variables are winsorized at 1 and 99 percent. t-values (in parentheses) use firm clusters. Significant results (at 5 percent level or better) are in italic. *,**,***Significant at 10, 5 and 1 percent level, respectively (suppressed for constant term)

[ViewLarge]

Sharing Unavailable