Variable definitions, measurements, and data sources
| Variables | Definition | Source |
|---|---|---|
| ESG | ESG Performance: continuous variable ranging from 0 (lowest corporate ESG performance) to 100 (highest corporate ESG performance) | Refinitiv Eikon database |
| ENVIR | Environmental performance: continuous variable that varies from 0 (lowest environmental performance) to 100 (highest environmental performance) | Refinitiv Eikon database |
| SOCIA | Social performance: continuous variable that varies from 0 (lowest social performance) to 100 (highest social performance) | Refinitiv Eikon database |
| GOVER | Governance performance: continuous variable that ranges from 0 (lowest governance performance) to 100 (higher governance performance) | Refinitiv Eikon database |
| RULLAW | Rule of law: continuous variable that captures the degree to which agents trust and comply with society's rules, ranging from −2.5 (lowest trust in society's rules) to +2.5 (highest trust) | Worldwide Governance Indicators, World Bank |
| ECOFRE | Economic Freedom: continuous variable that captures government size, regulatory efficiency, and market openness, ranging from 0 (least freedom) to 100 (most freedom) | Heritage Foundation |
| EDUIND | Education index: continuous variable that measures the average years of schooling (adults) and expected years of schooling (children), ranging from 11.90 (lowest educational level) to 23.10 (highest educational level) | United Nations Development Programme |
| TRAINT | Freedom to trade internationally: continuous variable that measures the ease of companies to export their products to other countries, ranging from 3.99 (least freedom to trade) to 10 (greater freedom) | Fraser Institute |
| MARKCAP | Market Capitalization: refers to the total dollar market value of a company's outstanding shares | Refinitiv Eikon database |
| ROE | Return on Equity: It is the ratio of net income to equity | Refinitiv Eikon database |
| FIRMSIZE | Firm Size: Natural logarithm of companies' total assets | Refinitiv Eikon database |
| LEVERAGE | Leverage: firms' long-term debt divided by common equity | Refinitiv Eikon database |
| BOARDSIZE | Board size: Number of directors on board | Refinitiv Eikon database |
| BOARDIND | Board independence: Total number of independent directors on boards/total number of directors on boards | Refinitiv Eikon database |
| BOARDIVER | Board diversity: Percentage of women on the board of directors | Refinitiv Eikon database |
| CSRCOM | Corporate Social Responsibility Committee: Dummy variable: 1 = if the company has a CSR committee, and 0 = otherwise | Refinitiv Eikon database |
| UNSIGN | UN Global Compact Signatory: Dummy variable: 1 = if the company is a signatory of the UN Global Compact, and 0 = otherwise | Refinitiv Eikon database |
| Variables | Definition | Source |
|---|---|---|
| ESG | ESG Performance: continuous variable ranging from 0 (lowest corporate ESG performance) to 100 (highest corporate ESG performance) | Refinitiv Eikon database |
| ENVIR | Environmental performance: continuous variable that varies from 0 (lowest environmental performance) to 100 (highest environmental performance) | Refinitiv Eikon database |
| SOCIA | Social performance: continuous variable that varies from 0 (lowest social performance) to 100 (highest social performance) | Refinitiv Eikon database |
| GOVER | Governance performance: continuous variable that ranges from 0 (lowest governance performance) to 100 (higher governance performance) | Refinitiv Eikon database |
| RULLAW | Rule of law: continuous variable that captures the degree to which agents trust and comply with society's rules, ranging from −2.5 (lowest trust in society's rules) to +2.5 (highest trust) | Worldwide Governance Indicators, World Bank |
| ECOFRE | Economic Freedom: continuous variable that captures government size, regulatory efficiency, and market openness, ranging from 0 (least freedom) to 100 (most freedom) | Heritage Foundation |
| EDUIND | Education index: continuous variable that measures the average years of schooling (adults) and expected years of schooling (children), ranging from 11.90 (lowest educational level) to 23.10 (highest educational level) | United Nations Development Programme |
| TRAINT | Freedom to trade internationally: continuous variable that measures the ease of companies to export their products to other countries, ranging from 3.99 (least freedom to trade) to 10 (greater freedom) | Fraser Institute |
| MARKCAP | Market Capitalization: refers to the total dollar market value of a company's outstanding shares | Refinitiv Eikon database |
| ROE | Return on Equity: It is the ratio of net income to equity | Refinitiv Eikon database |
| FIRMSIZE | Firm Size: Natural logarithm of companies' total assets | Refinitiv Eikon database |
| LEVERAGE | Leverage: firms' long-term debt divided by common equity | Refinitiv Eikon database |
| BOARDSIZE | Board size: Number of directors on board | Refinitiv Eikon database |
| BOARDIND | Board independence: Total number of independent directors on boards/total number of directors on boards | Refinitiv Eikon database |
| BOARDIVER | Board diversity: Percentage of women on the board of directors | Refinitiv Eikon database |
| CSRCOM | Corporate Social Responsibility Committee: Dummy variable: 1 = if the company has a CSR committee, and 0 = otherwise | Refinitiv Eikon database |
| UNSIGN | UN Global Compact Signatory: Dummy variable: 1 = if the company is a signatory of the UN Global Compact, and 0 = otherwise | Refinitiv Eikon database |
Source(s): Table created by author
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