The average value of EP is 123 thus suggest that on average basis 123 units of

The average value of ep is 123 thus suggest that on

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The average value of EP is -1.23, thus suggest that on average basis 1.23 units of toxic chemicals are released for every one unit of total assets by large companies. Since the median of EP -0.008, this suggests that environmental performance varies considerably from firm to firm. The average of size is 13.0, leverage ratio is 0.5, current ratio is 3.82, dividend yield is 2.01 and market to book ratio is 2.21.
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Page 21 of 38 Table 3. Descriptive Statistics for the Dependent and Control Variables COUNT MEAN MEDIAN MIN MAX SD 760 0.872 0.345 0 23.01 HR 760 0.57 0.30 -7.93 21.2 BL 760 0.77 0.70 -6.1 3.9 CAPM 760 1.17 0.98 -5.81 10.6 ENVPER 758 -1.23 -0.008 -153.9 0 ISO 760 0.49 0.42 0 1 CMS 760 0.21 0 0 1 ESCM 760 0.22 0 0 1 ETR 760 0.50 0.50 0 1 ROL 760 1.76 1.75 1.70 1.84 RQ 760 1.64 1.63 1.44 1.77 M2B 760 2.21 1.61 -2.7 5.5 DY 760 2.01 1.10 0 16.4 CR 760 3.82 1.54 0 62.4 D2E 760 0.50 0.40 -7.64 11.0 SIZE 759 13.0 13.4 2.30 18.7 Table contains variable count, mean, median, minimum and maximum values for all variables. SD is the Standard Deviation of market value of share price, HR and BL refer to the Harlow-Rao and Bawa and Lindenberg betas, ENVPER refers to the weighted average toxic substance per unit of assets, ISO refer to ISO-14000 certificates, CMS refer to Crisis Management System, ESCM refer to Environmental Supply Chain Management, ETRAINING refer to Environmental Training, ROL refer to Rule of Law, RQ refer to Regulatory Quality, M2B refer to Market to Book ratio, DY refer to Dividend Yield, CR refer to Current Ratio, D2E refer to Debt to Equity Ratio and Size refer to log of total assets. Table 4 reports the pairwise correlation coefficients of the independent and dependent variables used in this study. Overall, CEP is negatively related to different measures of risk. It supports the main hypothesis of our study that CEP and financial risk has a negative relationship. An interesting observation is that ISO and CMS is negatively correlated to CEP. Several studies (e.g. Boiral, 2007; Cañón-de-Francia & Garcés-Ayerbe, 2009; Paulraj & Jong, 2011) have used ISO-14001 certification as a proxy for CEP. The negative correlation between CEP and ISO suggests that ISO-14001 certification should not be taken as similar to toxic substances release. The results show that the correlation between leverage ratio and market to book is high. Although, the correlation coefficient is 0.513 it is less than the rule of thumb level of 0.80 (Gujarati, 2004). Therefore this relationship will not potentially affect our estimated model. Other pair-wise correlation coefficients reported in Table 4 are low and there are no obvious concerns or anomalies in the data. Furthermore, we conducted multi- collinearity diagnostic (unreported) for variables in the model by using variance inflation
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Page 22 of 38 Table 4 Correlation Coefficients SD HR BL CAPM CEP ISO CMS ESCM ETR ROL RQ M2B DY CR D2B SIZE SD 1 HR 0.027 1 BL 0.035 0.239*** 1 CAPM -0.050 0.76*** 0.232*** 1 CEP 0.0394 -0.0877** -0.222*** -0.043* 1 ISO 0.0731** 0.0437 0.0542 -0.00555 -0.0783** 1 CMS 0.0210 0.0392 0.0126 0.00195 -0.00941 0.257*** 1 ESCM 0.127*** 0.0570 -0.0677* 0.0248 0.0285 0.315*** 0.389*** 1 ETR 0.0832** 0.0437 -0.0233 0.0214 0.0510 0.254*** 0.150*** 0.232*** 1 ROL -0.0503 -0.0472 0.00308 0.0339 -0.0634* -0.0478 -0.0239 0.00615 -0.0646* 1 RQ 0.114*** 0.112*** 0.00360 0.0342 0.0727** 0.150*** 0.112*** 0.101*** 0.161*** 0.0836** 1 M2B 0.0664* 0.0710* 0.0540 0.110*** 0.0125 -0.0284 0.0731** -0.0163 0.0687* 0.000662 0.00963 1 DY 0.0681* -0.109*** 0.0259 -0.0752** 0.0967*** 0.0702* -0.0542 0.0556 0.0945*** -0.0318 0.0823** -0.0923** 1 CR -0.111*** 0.0530 0.124*** 0.0748** -0.116*** 0.0495 0.00672 -0.0888** -0.0790** 0.0308 -0.0423 -0.0569 -0.242*** 1 D2B 0.0329 -0.0160 0.000912 0.0360 0.0815** -0.0151 -0.00997 0.0180 0.0800** -0.00897 0.00766 0.513*** 0.135*** -0.140*** 1 SIZE 0.353*** -0.117*** 0.0463 -0.0841** 0.271*** 0.0918** -0.0147 0.139*** 0.109*** -0.0238 0.0780** 0.0621* 0.453*** -0.356*** 0.273*** 1
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Page 23 of 38 factors (VIFs). The results show that the highest VIF is 1.57 and the average of VIFs is 1.26 suggesting that multi-collinearity may not be the problem in this study. The estimated value
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