Introduction
Conceptual Background and Hypotheses
Corporate Sustainability
Share Repurchases
Firms’ Social and Environmental Value Orientation in the Context of Share Repurchases
The Moderating Role of Executives’ Stock Option Pay
Firms’ Social and Environmental Sustainability Performance in the Context of Share Repurchases
Data and Methodology
Sampling
Variables
Social and Environmental Value Orientation
Lists of terms for social value orientation, environmental value orientation, and sustainability orientation | |
---|---|
SVO | abus*, affordable, beneficial for society, beneficial to consumers, benevolen*, bribe*, caregiver*, caring, charit*, child education, civic, civil society, commitment to diversity, communit*, compassion*, corporate citizen, corporate citizenship, corrupt*, create jobs, CSR, developing countries, developing nations, developing world, development aid, dignity, disabilit*, disadvantaged, discrimination, diverse company, diverse organization, empathy, employee benefit, employee benefits, employee participation, employee relations, empower*, ensure diversity, equal opportunities, equal opportunity, equal rights, equality, ethic*, ethnic*, fair trade, fair treatment, fairness, for society, for the people, freedom, gay, gender diversity, gender equality, genero*, good cause, harmony, health and safety, health benefit, health benefits, healthier, homeless, human needs, human rights, humanit*, humankind, immigra*, improve education, inclusion, inclusive, indigenous, inequality, integrity, lesbian, LGBT*, life-transforming, literacy, livelihood, lives, living conditions, malnutrition, mankind, mentoring, microcredit, microfinance, minorit*, nourish*, occupational safety, our colleagues, our people, paid time, peace*, pension plan, pension plans, philantroph*, poorest, poverty, profit sharing, profitshar*, profit-sharing, promote diversity, pro-social, provide access to, public education, public health, quality of life, racial, refuge*, sexual orientation, social activities, social benefit, social engagement, social impact, social investment, social investments, social issue, social performance, social policy, social responsibilities, social responsibility, social welfare, socially, societal, stable employment, support families, support local, teamwork, their families, their children, underprivileged, underrepresented, unfair, veteran*, volunteer*, wellbeing, well-being, womens health, working conditions, workplace benefit*, work-life balance, youth education |
EnVO | air quality, alternative fuel, animal welfare, biodiversity, biological diversity, carbon abatement, carbon capture, carbon disclosure, carbon footprint, carbon-free, carbon–neutral, circular economy, clean air, clean coal, clean energy, clean water, clean-energy, cleaner coal, cleaner energy, cleaner operations, climate action, climate activities, climate change, climate impact, climate policy, climate protection, climate strategy, climate-change, climate-friendly, CO2-footprint, CO2-reduction, conservancy, conservation, conserve natural resources, contaminat*, COP21, deforestation, eco-activis*, eco-friendly, ecolog*, emission*, emit*, energyefficien*, energy-efficien*, environmental*, EPA, externalit*, fuel-efficien*, future generations, global warming, green building, green buildings, green energy, green investment, green investments, green tech, green technologies, green technology, greener, greenhouse, habitat*, hazardous waste, Kyoto, low-carbon, natural environment, ocean acidification, our planet, ozone, Paris agreement, pollut*, preservation, protect our environment, rainforest*, recycl*, reduce carbon dioxide, reduce CO2, reduce methane, reduce waste, reducing waste, reforestation, renewable*, resource consumption, species, sustainable business, sustainable energy, sustainable future, sustainable operations, sustainable processes, sustainable production, sustainable products, sustainable supply chain, sustainable technologies, sustainable technology, the environment, upcycl*, waste reduction, waste-reduc*, waste-to-energy, water scarcity, water-saving, wildlife, zero-carbon |
SO1a | accountability, comply with, corporate responsibility, disclos*, donat*, ensure compliance, ESG, have a duty, impact investing, invest responsibly, moral*, NGO*, nonprofit, non-profit, not for profit, our responsibilities, our responsibility, pro bono, responsibility to the, responsible investing, responsible investment, SDGs, stakeholder*, sustainability, sustainable development, sustainable investing, transparen*, triple bottom line |
Share Repurchases
Stock Option-Based Executive Incentives
Social and Environmental Performance
Control Variables
Modeling
Variables | n | M | SD | Min | Max | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 | SVO | 5223 | 2.87 | 2.96 | 0.00 | 27.9 | 1.00 | |||||||||||
2 | EnVO | 5223 | 1.12 | 2.36 | 0.00 | 29.9 | 0.13 | 1.00 | ||||||||||
3 | Share repurchasesa | 6327 | 713 | 1852 | 0.00 | 35,734 | 0.14 | − 0.09 | 1.00 | |||||||||
4 | Sustainability performance | 6218 | 3.36 | 9.61 | − 30.0 | 52.4 | 0.14 | − 0.08 | 0.19 | 1.00 | ||||||||
5 | Social performance | 6218 | 2.22 | 8.30 | − 30.0 | 42.4 | 0.13 | − 0.07 | 0.16 | 0.97 | 1.00 | |||||||
6 | Environmental performance | 6218 | 1.14 | 2.55 | − 7.14 | 10.0 | 0.11 | − 0.06 | 0.20 | 0.61 | 0.39 | 1.00 | ||||||
7 | Executive stock optionsa | 6209 | 34.7 | 85.8 | 0.00 | 2377 | 0.08 | − 0.09 | 0.29 | 0.04 | 0.04 | 0.02 | 1.00 | |||||
8 | Firm size | 6328 | 9.48 | 1.43 | 4.41 | 14.8 | 0.21 | 0.11 | 0.23 | 0.16 | 0.15 | 0.13 | 0.07 | 1.00 | ||||
9 | Firm age | 6328 | 35.02 | 18.88 | 0.00 | 66.0 | 0.08 | 0.19 | 0.07 | 0.14 | 0.10 | 0.19 | − 0.02 | 0.28 | 1.00 | |||
10 | Sales growth | 6321 | 0.09 | 0.64 | − 4.49 | 45.2 | − 0.01 | − 0.05 | − 0.05 | − 0.08 | − 0.08 | − 0.06 | 0.13 | − 0.06 | − 0.14 | 1.00 | ||
11 | Operating margin | 6328 | 0.06 | 1.70 | − 102 | 6.65 | 0.02 | − 0.02 | 0.10 | 0.04 | 0.03 | 0.03 | 0.11 | 0.00 | − 0.03 | 0.10 | 1.00 | |
12 | Asset growth | 6328 | 0.05 | 0.17 | − 2.68 | 0.91 | 0.02 | − 0.01 | − 0.05 | − 0.05 | − 0.05 | − 0.03 | 0.18 | − 0.02 | − 0.14 | 0.31 | 0.23 | 1.00 |
13 | R&D intensity | 6328 | 0.02 | 0.04 | 0.00 | 0.68 | − 0.08 | − 0.12 | 0.07 | 0.14 | 0.12 | 0.15 | 0.04 | − 0.24 | − 0.12 | 0.07 | 0.03 | 0.04 |
14 | Capital intensity | 5946 | 0.27 | 0.25 | 0.00 | 0.95 | − 0.04 | 0.35 | − 0.23 | − 0.16 | − 0.13 | − 0.17 | − 0.10 | − 0.04 | 0.13 | − 0.03 | − 0.07 | − 0.05 |
15 | Financial slack | 6328 | 0.08 | 0.09 | 0.00 | 0.79 | − 0.07 | − 0.16 | 0.05 | 0.07 | 0.05 | 0.08 | 0.03 | − 0.34 | − 0.17 | 0.04 | 0.04 | 0.06 |
16 | Leverage ratio | 6328 | 0.22 | 0.17 | 0.00 | 1.65 | − 0.05 | 0.15 | − 0.15 | − 0.01 | − 0.02 | 0.02 | − 0.12 | − 0.04 | 0.06 | − 0.09 | − 0.07 | − 0.10 |
17 | Stock price performance | 6292 | 0.29 | 5.30 | − 1.00 | 353 | 0.00 | − 0.01 | 0.05 | − 0.01 | 0.00 | − 0.04 | 0.03 | − 0.02 | − 0.03 | 0.03 | 0.01 | − 0.09 |
18 | Tobin’s Q | 6306 | 1.35 | 1.31 | 0.00 | 15.53 | 0.01 | − 0.15 | 0.13 | 0.04 | 0.04 | 0.04 | 0.31 | − 0.45 | − 0.23 | 0.17 | 0.13 | 0.15 |
19 | Shareholder concentration | 6265 | 1.50 | 25.62 | 0.00 | 1000 | 0.03 | 0.03 | − 0.03 | − 0.01 | 0.00 | − 0.02 | − 0.05 | 0.00 | − 0.07 | 0.00 | 0.01 | 0.01 |
20 | Dividendsa | 6305 | 531 | 1327 | 0.00 | 36,112 | 0.15 | 0.16 | 0.26 | 0.19 | 0.17 | 0.17 | 0.05 | 0.56 | 0.50 | − 0.14 | 0.04 | − 0.10 |
21 | CEO tenure | 6244 | 6.50 | 6.50 | 0.00 | 53.00 | − 0.01 | − 0.06 | − 0.01 | 0.00 | 0.00 | 0.00 | 0.13 | − 0.07 | − 0.12 | 0.05 | 0.01 | 0.07 |
22 | CEO-CFO power balance | 6209 | 1.99 | 1.10 | 0.00 | 29.25 | − 0.02 | 0.01 | − 0.03 | − 0.07 | − 0.05 | − 0.07 | 0.01 | − 0.07 | 0.01 | 0.02 | 0.00 | 0.02 |
23 | U.S. economic growth | 6328 | 0.02 | 0.02 | − 0.03 | 0.04 | 0.04 | − 0.09 | 0.14 | 0.12 | 0.10 | 0.11 | 0.21 | 0.01 | 0.02 | 0.14 | 0.06 | 0.04 |
24 | Industry competitiveness | 6328 | 0.07 | 0.06 | 0.03 | 0.45 | − 0.08 | − 0.03 | − 0.05 | − 0.06 | − 0.04 | − 0.07 | 0.02 | − 0.09 | − 0.03 | 0.00 | − 0.05 | − 0.01 |
Variables | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 | SVO | ||||||||||||
2 | EnVO | ||||||||||||
3 | Share repurchasesa | ||||||||||||
4 | Sustainability performance | ||||||||||||
5 | Social performance | ||||||||||||
6 | Environmental performance | ||||||||||||
7 | Executive stock optionsa | ||||||||||||
8 | Firm size | ||||||||||||
9 | Firm age | ||||||||||||
10 | Sales growth | ||||||||||||
11 | Operating margin | ||||||||||||
12 | Asset growth | ||||||||||||
13 | R&D intensity | 1.00 | |||||||||||
14 | Capital intensity | − 0.23 | 1.00 | ||||||||||
15 | Financial slack | 0.41 | − 0.28 | 1.00 | |||||||||
16 | Leverage ratio | − 0.13 | 0.30 | − 0.17 | 1.00 | ||||||||
17 | Stock price performance | 0.00 | 0.00 | − 0.01 | 0.00 | 1.00 | |||||||
18 | Tobin’s Q | 0.39 | − 0.10 | 0.42 | − 0.19 | 0.06 | 1.00 | ||||||
19 | Shareholder concentration | − 0.01 | 0.04 | − 0.02 | 0.04 | 0.03 | − 0.01 | 1.00 | |||||
20 | Dividendsa | − 0.23 | 0.09 | − 0.23 | − 0.01 | − 0.02 | − 0.20 | 0.00 | 1.00 | ||||
21 | CEO tenure | 0.03 | 0.01 | 0.04 | − 0.02 | 0.01 | 0.12 | − 0.02 | − 0.07 | 1.00 | |||
22 | CEO-CFO power balance | − 0.01 | 0.05 | − 0.02 | 0.02 | 0.01 | − 0.02 | 0.00 | − 0.03 | − 0.01 | 1.00 | ||
23 | U.S. economic growth | − 0.01 | − 0.01 | − 0.03 | − 0.02 | 0.03 | 0.11 | − 0.02 | 0.03 | 0.02 | − 0.01 | 1.00 | |
24 | Industry competitiveness | − 0.01 | 0.22 | − 0.02 | 0.09 | 0.01 | 0.03 | − 0.02 | 0.01 | 0.02 | 0.08 | 0.00 | 1.00 |
Controlling for Endogeneity
Variables | (1) SVO | (2) EnVO |
---|---|---|
Industry SVOa | 0.42*** | |
(0.09) | ||
Industry EnVOa | 0.56*** | |
(0.13) | ||
Firm size | 0.41*** | 0.30*** |
(0.11) | (0.07) | |
Firm age | 0.09 | − 0.06 |
(0.12) | (0.08) | |
Sales growth | 0.02 | − 0.01 |
(0.03) | (0.01) | |
Operating margin | 0.04 | 0.02 |
(0.02) | (0.01) | |
Financial slack | 0.03 | 0.02 |
(0.06) | (0.04) | |
Leverage ratio | − 0.17** | 0.08* |
(0.08) | (0.04) | |
Stock price performance | − 0.00 | − 0.22** |
(0.27) | (0.11) | |
Shareholder concentration | 0.04*** | − 0.02** |
(0.01) | (0.01) | |
CEO tenure | − 0.11 | − 0.00 |
(0.07) | (0.04) | |
CEO-CFO power balance | 0.02 | 0.02 |
(0.05) | (0.03) | |
U.S. economic growth | − 0.89*** | − 0.25* |
(0.24) | (0.14) | |
Industry competitiveness | − 0.46 | − 0.48* |
(0.57) | (0.28) | |
Constant | 3.86*** | 1.03*** |
(0.39) | (0.18) | |
Time-fixed effects | Included | Included |
Industry-fixed effects | Included | Included |
Observations | 4503 | 4503 |
Cragg–Donald Wald F-statisticb | 11.98 | 49.62 |
p-value | 0.00 | 0.00 |
Wu-Hausman Fc | 39.07 | 55.19 |
p-value | 0.00 | 0.00 |
Results
The Association of Social and Environmental Value Orientation and Share Repurchases
Hypothesis 1 | Hypothesis 2 | ||||
---|---|---|---|---|---|
(1) t + 1 Basic model | (2) t + 1 Main model | (3) t + 1 Main model excl. financial sectorb | (4) t + 1 SVO interacted w stock optionsb | (5) t + 1 EnVO interacted w stock optionsb | |
Dependent variables | Share repurchases | Share repurchases | |||
Predicted SVOa | − 0.17 | − 0.27 | − 0.39** | − 0.25 | |
(0.19) | (0.19) | (0.19) | (0.19) | ||
Predicted EnVOa | 0.25 | − 1.53*** | − 0.04 | − 1.43*** | |
(0.27) | (0.47) | (0.27) | (0.46) | ||
Predicted EnVOa (squared) | − 0.39** | − 0.37** | |||
(0.19) | (0.18) | ||||
Predicted EnVOa (cubic) | 0.14*** | 0.13*** | |||
(0.04) | (0.03) | ||||
Executive stock options | 0.24** | 0.41*** | |||
(0.10) | (0.12) | ||||
SVO \(\times\) Executive stock options | − 0.16* | ||||
(0.09) | |||||
EnVO \(\times\) Executive stock options | 0.62*** | ||||
(0.15) | |||||
EnVO (squared) \(\times\) Executive stock options | 0.02 | ||||
(0.13) | |||||
EnVO (cubic) \(\times\) Executive stock options | − 0.03 | ||||
(0.04) | |||||
Firm size | 0.92*** | 0.81** | 1.37*** | 1.19*** | 1.29*** |
(0.30) | (0.37) | (0.42) | (0.42) | (0.41) | |
Firm age | − 0.74 | − 0.77 | 0.36 | − 0.16 | 0.29 |
(0.68) | (0.73) | (0.82) | (0.75) | (0.81) | |
Sales growth | − 0.02 | − 0.02 | 0.05 | 0.06 | 0.03 |
(0.06) | (0.07) | (0.07) | (0.07) | (0.07) | |
Operating margin | 0.22*** | 0.22*** | 0.47*** | 0.46*** | 0.45*** |
(0.07) | (0.06) | (0.12) | (0.11) | (0.11) | |
Asset growth | − 0.11** | − 0.11** | − 0.18*** | − 0.19*** | − 0.19*** |
(0.04) | (0.05) | (0.05) | (0.05) | (0.05) | |
R&D intensity | 0.05 | 0.06 | 0.10 | 0.12 | 0.09 |
(0.10) | (0.19) | (0.19) | (0.20) | (0.19) | |
Financial slack | − 0.03 | − 0.06 | 0.01 | 0.01 | − 0.00 |
(0.07) | (0.08) | (0.08) | (0.08) | (0.08) | |
Leverage ratio | − 0.50*** | − 0.62*** | − 0.48*** | − 0.54*** | − 0.46*** |
(0.12) | (0.15) | (0.15) | (0.14) | (0.15) | |
Stock price performance | − 0.06*** | − 0.23 | − 0.18 | − 0.07 | − 0.26 |
(0.02) | (0.21) | (0.24) | (0.25) | (0.25) | |
Shareholder concentration | 0.07*** | 0.04*** | 0.03*** | 0.04*** | 0.03*** |
(0.00) | (0.01) | (0.01) | (0.01) | (0.01) | |
Dividends | 0.10 | 0.12 | 0.20 | 0.22 | 0.18 |
(0.12) | (0.13) | (0.14) | (0.14) | (0.14) | |
CEO tenure | 0.06 | 0.08 | 0.03 | − 0.01 | − 0.02 |
(0.07) | (0.08) | (0.08) | (0.08) | (0.08) | |
CEO-CFO power balance | − 0.07* | − 0.09** | − 0.08* | − 0.09** | − 0.07* |
(0.04) | (0.04) | (0.04) | (0.04) | (0.04) | |
U.S. economic growth | − 1.33** | − 1.11* | − 0.09 | − 0.50 | − 0.24 |
(0.52) | (0.63) | (0.74) | (0.70) | (0.74) | |
Industry competitiveness | − 0.50 | − 0.58 | − 0.81 | − 0.73 | − 0.73 |
(0.50) | (0.58) | (0.62) | (0.59) | (0.60) | |
Constant | 5.47*** | 5.49*** | 4.90*** | 5.23*** | 5.02*** |
(0.45) | (0.53) | (0.73) | (0.64) | (0.72) | |
Time-fixed effects | Included | Included | Included | Included | Included |
Firm-fixed effects | Included | Included | Included | Included | Included |
Observations | 4773 | 4173 | 3335 | 3335 | 3335 |
R-squared (within) | 0.15 | 0.16 | 0.16 | 0.15 | 0.17 |
F-statistic | 31.44*** | 17.65*** | 12.78*** | 12.01*** | 12.40*** |
(1) t + 1 Main model excl. dividendsb | (2) t + 1 & t + 2c Main model | (3) t + 1 Main model w Compustat repurchasesd | (4) t + 1 Main model w auto-regression | (5) t + 1 Main model w alternative DV | (6) t + 1 Main model w alternative DV | (7) t + 1 Main model w alternative moderatore | |
---|---|---|---|---|---|---|---|
Dependent variables | Share repurchases | Share repurchases | Share repurchases | Share repurchases | Dividends | Leverage ratio | Share repurchases |
Predicted SVOa | − 0.24 | − 0.34* | − 0.25 | − 0.22 | − 0.10 | − 0.06*** | − 0.26 |
(0.19) | (0.20) | (0.18) | (0.19) | (0.07) | (0.01) | (0.19) | |
Predicted EnVOa | − 1.44*** | − 1.50*** | − 1.09** | − 1.42** | − 0.14 | 0.09*** | − 1.46*** |
(0.46) | (0.48) | (0.45) | (0.46) | (0.13) | (0.02) | (0.46) | |
Predicted EnVOa (squared) | − 0.37** | − 0.37* | − 0.35* | − 0.39** | 0.00 | − 0.02** | − 0.38** |
(0.18) | (0.19) | (0.19) | (0.18) | (0.05) | (0.01) | (0.18) | |
Predicted EnVOa (cubic) | 0.13*** | 0.12*** | 0.11*** | 0.14*** | 0.00 | 0.00 | 0.14*** |
(0.03) | (0.04) | (0.04) | (0.04) | (0.01) | (0.00) | (0.04) | |
Executive stock options | 0.41*** | 0.33*** | 0.36*** | 0.30** | 0.34*** | ||
(0.12) | (0.11) | (0.13) | (0.12) | (0.13) | |||
EnVO \(\times\) Executive stock options | 0.63*** | 0.37** | 0.54** | 0.45*** | 0.48*** | ||
(0.15) | (0.16) | (0.21) | (0.17) | (0.18) | |||
EnVO (squared) \(\times\) Executive stock options | 0.02 | − 0.02 | 0.02 | 0.01 | − 0.01 | ||
(0.13) | (0.12) | (0.12) | (0.12) | (0.13) | |||
EnVO (cubic) \(\times\) Executive stock options | − 0.03 | 0.01 | − 0.01 | − 0.01 | − 0.00 | ||
(0.04) | (0.04) | (0.04) | (0.04) | (0.04) | |||
Share repurchases (t = 0) | 0.39*** | ||||||
(0.08) | |||||||
Share repurchases (t − 1) | − 0.16** | ||||||
(0.07) | |||||||
Firm size | 1.39*** | 1.23*** | 1.33*** | 1.21*** | 0.39*** | 0.04* | 1.32*** |
(0.40) | (0.43) | (0.42) | (0.41) | (0.13) | (0.02) | (0.42) | |
Firm age | 0.32 | 2.06** | 0.52 | 0.28 | 0.32 | 0.14*** | 0.33 |
(0.82) | (0.84) | (0.78) | (0.82) | (0.29) | (0.04) | (0.81) | |
Sales growth | 0.03 | 0.14** | 0.12* | 0.01 | 0.06* | − 0.00 | 0.03 |
(0.07) | (0.07) | (0.07) | (0.07) | (0.03) | (0.00) | (0.07) | |
Operating margin | 0.45*** | 0.17 | 0.31*** | 0.40*** | 0.14** | − 0.01*** | 0.45*** |
(0.11) | (0.11) | (0.11) | (0.11) | (0.06) | (0.00) | (0.11) | |
Asset growth | − 0.19*** | − 0.19*** | − 0.15*** | − 0.17*** | 0.02 | 0.00 | − 0.19*** |
(0.05) | (0.06) | (0.05) | (0.05) | (0.02) | (0.00) | (0.05) | |
R&D intensity | 0.09 | − 0.11 | 0.21 | 0.06 | − 0.06 | 0.00 | 0.09 |
(0.19) | (0.18) | (0.19) | (0.18) | (0.06) | (0.01) | (0.19) | |
Financial slack | 0.01 | − 0.02 | 0.04 | − 0.02 | 0.05* | − 0.00 | 0.00 |
(0.08) | (0.08) | (0.08) | (0.08) | (0.03) | (0.00) | (0.08) | |
Leverage ratio | − 0.47*** | − 0.54*** | − 0.53*** | − 0.49*** | − 0.09** | − 0.47*** | |
(0.15) | (0.16) | (0.15) | (0.15) | (0.04) | (0.15) | ||
Stock price performance | − 0.25 | − 0.43* | − 0.27 | − 0.28 | − 0.10 | 0.01 | − 0.28 |
(0.24) | (0.24) | (0.29) | (0.25) | (0.11) | (0.01) | (0.25) | |
Shareholder concentration | 0.03*** | 0.03*** | 0.03*** | 0.03*** | 0.00 | 0.00*** | 0.03*** |
(0.01) | (0.01) | (0.01) | (0.01) | (0.00) | (0.00) | (0.01) | |
Dividends | − 0.07 | 0.25* | 0.19 | 1.75*** | 0.00 | 0.19 | |
(0.14) | (0.13) | (0.14) | (0.09) | (0.01) | (0.14) | ||
CEO tenure | − 0.02 | − 0.11 | 0.02 | 0.01 | − 0.02 | − 0.01 | − 0.00 |
(0.08) | (0.09) | (0.08) | (0.08) | (0.03) | (0.01) | (0.08) | |
CEO-CFO power balance | − 0.07* | − 0.11** | − 0.07* | − 0.08** | − 0.01 | − 0.00 | − 0.07* |
(0.04) | (0.04) | (0.04) | (0.04) | (0.01) | (0.00) | (0.04) | |
U.S. economic growth | − 0.18 | 1.74** | − 0.06 | − 0.20 | − 0.42 | − 0.03 | − 0.18 |
(0.74) | (0.73) | (0.69) | (0.75) | (0.27) | (0.04) | (0.74) | |
Industry competitiveness | − 0.75 | − 0.37 | − 0.71 | − 0.68 | − 0.18 | − 0.00 | − 0.74 |
(0.60) | (0.66) | (0.57) | (0.60) | (0.18) | (0.02) | (0.60) | |
Constant | 5.00*** | 4.13*** | 5.04*** | 4.96*** | 4.84*** | 0.27*** | 4.98*** |
(0.72) | (0.70) | (0.68) | (0.73) | (0.26) | (0.03) | (0.72) | |
Time-fixed effects | Included | Included | Included | Included | Included | Included | Included |
Firm-fixed effects | Included | Included | Included | Included | Included | Included | Included |
Observations | 3340 | 3334 | 3335 | 3335 | 3334 | 3335 | 3335 |
R-squared (within) | 0.17 | 0.13 | 0.18 | 0.18 | 0.54 | 0.17 | 0.17 |
F-statistic | 12.80*** | 9.56*** | 13.06*** | 12.09*** | 41.74*** | 11.48*** | 12.09*** |
The Association of Share Repurchases and Social and Environmental Performance
Dependent variables | (1) t + 1 Basic model | (2) t + 1 Main model | (3) t + 1 Main model | (4) t + 1 Main model | (5) t + 2 Main model | (6) t + 2 Main model | (7) t + 2 Main model | (8) t + 3 Main model | (9) t + 3 Main model | (10) t + 3 Main model |
---|---|---|---|---|---|---|---|---|---|---|
Social & environmental performance | Social & environmental performance | Social performance | Environmental performance | Social & environmental performance | Social performance | Environmental performance | Social & environmental performance | Social performance | Environmental performance | |
Share repurchases | − 0.42* | − 0.29 | − 0.13* | − 0.73*** | − 0.58*** | − 0.14** | − 0.87*** | − 0.78*** | − 0.09 | |
(0.22) | (0.18) | (0.07) | (0.24) | (0.20) | (0.07) | (0.20) | (0.19) | (0.07) | ||
Firm size | − 0.01 | 0.05 | 0.32 | − 0.27 | 0.52 | 0.69 | − 0.17 | 1.04 | 1.28 | − 0.24 |
(0.78) | (0.78) | (0.68) | (0.23) | (0.87) | (0.77) | (0.26) | (0.94) | (0.85) | (0.27) | |
Firm age | 24.56*** | 24.57*** | 18.08*** | 6.49*** | 27.38*** | 20.66*** | 6.72*** | 14.65*** | 11.33*** | 3.32*** |
(1.53) | (1.53) | (1.38) | (0.50) | (1.44) | (1.29) | (0.50) | (3.16) | (3.03) | (0.80) | |
Sales growth | 0.02 | 0.01 | − 0.01 | 0.03** | 0.05 | 0.01 | 0.04*** | 0.06* | 0.06* | − 0.00 |
(0.05) | (0.05) | (0.05) | (0.01) | (0.04) | (0.04) | (0.01) | (0.03) | (0.03) | (0.01) | |
Operating margin | − 0.04 | − 0.03 | 0.03 | − 0.06*** | − 0.07 | − 0.01 | − 0.07*** | − 0.13*** | − 0.07 | − 0.06*** |
(0.04) | (0.04) | (0.04) | (0.01) | (0.05) | (0.04) | (0.01) | (0.05) | (0.04) | (0.01) | |
Asset growth | 0.05 | 0.03 | 0.06 | − 0.03 | 0.27** | 0.21* | 0.05 | 0.03 | − 0.05 | 0.08** |
(0.13) | (0.13) | (0.12) | (0.04) | (0.13) | (0.12) | (0.03) | (0.15) | (0.13) | (0.04) | |
R&D intensity | − 0.61* | − 0.62** | − 0.39* | − 0.23** | − 0.50* | − 0.33 | − 0.18* | − 0.42 | − 0.29 | − 0.12 |
(0.32) | (0.31) | (0.23) | (0.11) | (0.30) | (0.24) | (0.10) | (0.28) | (0.22) | (0.09) | |
Capital intensity | 1.34 | 1.26 | 1.29 | − 0.03 | 2.14* | 2.14** | − 0.00 | 3.24*** | 3.27*** | − 0.04 |
(0.97) | (0.96) | (0.83) | (0.28) | (1.11) | (0.94) | (0.32) | (1.20) | (1.05) | (0.32) | |
Financial slack | − 0.23 | − 0.21 | − 0.21 | − 0.01 | − 0.30 | − 0.29 | − 0.01 | − 0.43* | − 0.41** | − 0.01 |
(0.22) | (0.22) | (0.20) | (0.06) | (0.24) | (0.22) | (0.07) | (0.23) | (0.20) | (0.07) | |
Leverage ratio | 0.18 | 0.20 | 0.13 | 0.08 | − 0.02 | 0.01 | − 0.03 | 0.17 | 0.21 | − 0.04 |
(0.26) | (0.26) | (0.23) | (0.07) | (0.30) | (0.27) | (0.08) | (0.35) | (0.32) | (0.09) | |
Stock price performance | − 0.03 | − 0.03 | − 0.01 | − 0.02 | − 0.03 | − 0.05 | 0.02 | − 0.12 | − 0.09 | − 0.03 |
(0.08) | (0.08) | (0.08) | (0.02) | (0.13) | (0.11) | (0.03) | (0.11) | (0.10) | (0.03) | |
Tobin’s Q (t − 1) | − 0.39 | − 0.35 | − 0.44 | 0.10 | − 0.30 | − 0.33 | 0.03 | 0.27 | 0.30 | − 0.03 |
(0.33) | (0.33) | (0.30) | (0.08) | (0.34) | (0.32) | (0.08) | (0.34) | (0.32) | (0.08) | |
Shareholder concentration | − 0.06*** | − 0.05*** | − 0.07*** | 0.01*** | − 0.03 | − 0.02 | − 0.00 | − 0.02 | 0.02 | − 0.04*** |
(0.01) | (0.01) | (0.01) | (0.00) | (0.02) | (0.01) | (0.00) | (0.02) | (0.02) | (0.00) | |
U.S. economic growth | 5.50*** | 5.43*** | 3.83*** | 1.60*** | 2.52*** | 1.98*** | 0.54*** | − 5.10*** | − 3.61*** | − 1.49*** |
(1.42) | (1.43) | (1.37) | (0.36) | (0.44) | (0.43) | (0.12) | (1.30) | (1.27) | (0.33) | |
Industry competitiveness | 4.12*** | 4.07*** | 4.32*** | − 0.25 | 5.60*** | 6.09*** | − 0.49 | 3.28** | 3.49** | − 0.21 |
(1.28) | (1.29) | (1.11) | (0.44) | (1.33) | (1.14) | (0.49) | (1.47) | (1.37) | (0.43) | |
Constant | − 0.45 | − 0.39 | − 0.28 | − 0.11 | 2.90*** | 1.93*** | 0.97*** | 6.97*** | 4.90*** | 2.07*** |
(1.06) | (1.07) | (1.02) | (0.26) | (0.27) | (0.26) | (0.06) | (0.58) | (0.56) | (0.15) | |
Time-fixed effects | Included | Included | Included | Included | Included | Included | Included | Included | Included | Included |
Firm-fixed effects | Included | Included | Included | Included | Included | Included | Included | Included | Included | Included |
Observations | 4823 | 4823 | 4823 | 4823 | 4364 | 4364 | 4364 | 3905 | 3905 | 3905 |
R-squared (within) | 0.41 | 0.41 | 0.36 | 0.36 | 0.39 | 0.35 | 0.34 | 0.36 | 0.33 | 0.30 |
F-statistic | 71.99*** | 71.26*** | 82.34*** | 33.19*** | 51.07*** | 48.51*** | 33.08*** | 56.05*** | 55.09*** | 45.89*** |
Dependent variables | (1) t + 3 Main model excl. financial sector firmsa | (2) t + 3 Main model excl. financial slackb | (3) t + 3 Main model excl Tobin’s Qb | (4) t + 3 Main model w auto-regressionc | (5) t + 3 Main model w alternative DV | (6) t + 3 Main model w alternative DV |
---|---|---|---|---|---|---|
Social & environmental performance | Social & environmental performance | Social & environmental performance | Social & environmental performance | Aggregate sustainability strengthsd | Aggregate sustainability concernsd | |
Share repurchases | − 0.89*** | − 0.88*** | − 0.86*** | − 0.56*** | − 0.60*** | 0.33** |
(0.22) | (0.20) | (0.20) | (0.18) | (0.22) | (0.15) | |
Total sustainability performance (t + 2) | 4.06*** | |||||
(0.18) | ||||||
Total sustainability performance (t + 1) | − 0.67*** | |||||
(0.20) | ||||||
Total sustainability performance (t + 0) | − 0.78*** | |||||
(0.17) | ||||||
Firm size | 0.99 | 1.34 | 0.90 | 0.60 | 2.82*** | 2.06*** |
(1.11) | (0.90) | (0.93) | (0.66) | (0.89) | (0.54) | |
Firm age | 16.90*** | 14.45*** | 14.35*** | 23.82*** | 7.37** | − 12.30*** |
(3.50) | (3.15) | (3.13) | (3.76) | (3.11) | (1.81) | |
Sales growth | 0.06* | 0.06* | 0.06* | 0.03 | 0.01 | − 0.03 |
(0.03) | (0.03) | (0.03) | (0.03) | (0.05) | (0.02) | |
Operating margin | − 0.14*** | − 0.13*** | − 0.11** | − 0.08** | − 0.11** | 0.05* |
(0.05) | (0.05) | (0.04) | (0.04) | (0.05) | (0.02) | |
Asset growth | 0.03 | 0.01 | 0.06 | − 0.08 | − 0.08 | − 0.06 |
(0.16) | (0.14) | (0.14) | (0.13) | (0.14) | (0.08) | |
R&D intensity | − 0.42 | − 0.39 | − 0.40 | − 0.29 | − 0.31 | 0.14 |
(0.28) | (0.27) | (0.29) | (0.19) | (0.27) | (0.13) | |
Capital intensity | 3.25*** | 3.57*** | 3.25*** | 2.42*** | 3.01*** | − 0.65 |
(1.22) | (1.18) | (1.20) | (0.85) | (1.13) | (0.67) | |
Financial slack | − 0.48** | − 0.44* | − 0.33* | − 0.61*** | − 0.03 | |
(0.24) | (0.23) | (0.18) | (0.23) | (0.12) | ||
Leverage ratio | 0.13 | 0.19 | 0.13 | 0.23 | − 0.18 | − 0.21 |
(0.36) | (0.35) | (0.34) | (0.26) | (0.31) | (0.18) | |
Stock price performance | − 0.15 | − 0.11 | − 0.12 | − 0.10 | − 0.11 | 0.09 |
(0.13) | (0.11) | (0.12) | (0.12) | (0.10) | (0.06) | |
Tobin’s Q (t − 1) | 0.26 | 0.31 | 0.23 | − 0.22 | − 0.28* | |
(0.36) | (0.34) | (0.27) | (0.34) | (0.17) | ||
Shareholder concentration | − 0.01 | − 0.02 | − 0.02 | − 0.02 | − 0.18*** | − 0.22*** |
(0.02) | (0.02) | (0.02) | (0.01) | (0.01) | (0.01) | |
U.S. economic growth | − 4.08*** | − 5.04*** | − 5.22*** | 1.08 | − 3.52*** | 2.02*** |
(1.45) | (1.31) | (1.29) | (1.63) | (1.28) | (0.75) | |
Industry competitiveness | 3.15** | 3.27** | 3.25** | 1.37 | 0.12 | − 1.33 |
(1.49) | (1.47) | (1.47) | (1.15) | (1.56) | (0.87) | |
Constant | 4.72*** | 6.96*** | 7.01*** | 4.75*** | 11.44*** | 3.77*** |
(0.90) | (0.58) | (0.57) | (0.69) | (0.57) | (0.34) | |
Time-fixed effects | Included | Included | Included | Included | Included | Included |
Firm-fixed effects | Included | Included | Included | Included | Included | Included |
Observations | 3348 | 3905 | 3905 | 3896 | 3905 | 3905 |
R-squared (within) | 0.35 | 0.36 | 0.36 | 0.47 | 0.31 | 0.47 |
F-statistic | 67.11*** | 58.49*** | 58.09*** | 120.1*** | 53.39*** | 61.96*** |