Table 3 Operationalization of variables
Variable | Name | Mnemonic | Type | Operationalization | Source |
|---|---|---|---|---|---|
CFP | Return on Assets | ROA | Ratio | Indicator of how profitable a company is relative to its total assets, in percentage calculated as (Trailing 12 M Net Income / Average Total Assets) * 100 | Bloomberg |
Return on Equity | ROE | Ratio | Measure of a corporation’s profitability calculated as: (T12 Net Income Available for Common Shareholders / Average Total Common Equity) * 100 | Bloomberg | |
Tobin’s Q | TobinsQ | Ratio | Ratio of the market value of a firm to the replacement cost of the firm’s assets calculated as (Market Cap + Total Liabilities + Preferred Equity + Minority Interest) / Total Assets | Bloomberg | |
CSP | ESG-Score | ESG | Numeric | Proprietary Bloomberg score ranging from 0.1 to 100 based on the extent of a company’s Environmental, Social, and Governance (ESG) disclosure. | Bloomberg |
E-Score | E | Numeric | Proprietary Bloomberg score ranging from 0.1 to 100 based on the extent of a company’s environmental disclosure as part of Environmental, Social and Governance (ESG) data. | Bloomberg | |
S-Score | S | Numeric | Proprietary Bloomberg score ranging from 0.1 to 100 based on the extent of a company’s social disclosure as part of Environmental, Social and Governance (ESG) data. | Bloomberg | |
G-Score | G | Numeric | Proprietary Bloomberg score ranging from 0.1 to 100 based on the extent of a company’s governance disclosure as part of Environmental, Social and Governance (ESG) data. | Bloomberg | |
Control Variables | Firm Size | Fsize | Numeric | Log of Market Capitalization | Prowess |
Sector | Sector | Category | Sector defined on the basis of National Industry Classification 2-Digit Code | Prowess | |
Firm Age | Fage | Numeric | Difference between the current year from Year of incorporation | Prowess | |
R&D Intensity | R_D | Ratio | R&D expenditure as a % of revenue calculated as (R&D Expense / Revenue) * 100 | Bloomberg | |
Risk | Risk | Numeric | Volatility measure of the percentage price change of the security given a 1 % change in a representative market index. The beta value is considered as risk | Prowess | |
ESI | ESI | Binary | 1 for firms belonging to ESI sector and 0 otherwise based on categorization done by Central Pollution Control Board, Government of India | Prowess |