Table 4 Description and source of the variables analyzed in this study.
Variable name | Description | Source |
|---|---|---|
Dependent variable | ||
Carbon productivity | Sales scaled by tons of CO2 equivalent emitted by ETS-participating firms. Values were multiplied by 1 million for clarity | Ministry of Environment/COMPUSTAT |
Independent variable | ||
ETS | Indicator variable equaling 1 if the firm participated in ETS | Ministry of Environment |
Subsample variables | ||
ROA | Return on assets | COMPUSTAT |
Patent | Indicator variable equaling 1 if the firm registered more than one patent | Korea Intellectual Property Rights Information Service |
Green CEOs | Indicator variable equaling 1 if the CEO of a firm has educational or job experiences in environment-related fields | TS2000/JOINS |
Control variables | ||
Log(asset) | Log of a firm’s total assets | COMPUSTAT |
Tobin’s q | Tobin’s q calculated as: (the market value of common stock + book value of preferred stock + (current liabilities – current assets) + long-term debts)/book value of total assets | COMPUSTAT |
Log(sales) | Log of a firm’s sales | COMPUSTAT |
Tangibility | Net tangible assets calculated as follows: total assets – intangible assets – total liabilities | COMPUSTAT |
Cash | Firm’s net cash | COMPUSTAT |
Cash flow | Free cash flow calculated as: net income + (depreciation/amortization) – change in working capital – capital expenditure | COMPUSTAT |
