Dependent variables |
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Tobin’s Q |
TOBQ
|
The q ratio is defined between the company’s market value and the replacement cost of its assets. |
Bloom & Van Reenen (2007Bloom, N., & Van Reenen, J. (2007). Measuring and explaining management practices across firms and countries. The Quarterly Journal of Economics, 122(4). 1351-1408. https://doi.org/10.1162/qjec.2007.122.4.1351 https://doi.org/10.1162/qjec.2007.122.4....
); Tobin (1969Tobin, J. (1969). A general equilibrium approach to monetary theory. Journal of Money Credit And Banking, 1(1). 15-29. https://doi.org/10.2307/1991374 https://doi.org/10.2307/1991374...
); Gupta, Banerjee, & Onur (2017Gupta, K., Banerjee, R., & Onur, I. (2017). The effects of R&D and competition on firm value: International evidence. International Review of Economics & Finance, 51, 391-404. https://doi.org/10.1016/j.iref.2017.07.003 https://doi.org/10.1016/j.iref.2017.07.0...
); Rocha, Dal-Poz, de Oliveira, & Almeida (2016Rocha, L. A.; Dal-Poz, M. E.; Oliveira, F. P. S.; & Almeida, C. A. S. (2016). O impacto dos investimentos em pesquisa &; desenvolvimento no desempenho das empresas. Revista de Economia Contemporânea, 20(1), 58-91. https://doi.org/10.1590/198055272013 https://doi.org/10.1590/198055272013...
); Pukthuanthong et al. (2013Pukthuanthong, K., Walker, T. J., Thiengtham, D. N., & Du, H. (2013). Does family ownership create or destroy value? Evidence from Canada. International Journal of Managerial Finance, 9(1), 13-48. https://doi.org/10.1108/17439131311298511 https://doi.org/10.1108/1743913131129851...
); Rahman & Mustafa (2018Rahman, M., & Mustafa, M. (2018). Dynamics influences of Tobin’s Q and CEO compensation on US stocks. Journal of Financial Economic Policy, 10(1), 2-16. https://doi.org/10.1108/JFEP-03-2017-0017 https://doi.org/10.1108/JFEP-03-2017-001...
) |
Independent variables |
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Advertising expenditure |
Adv
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Represents the cost of advertising and promotional expenses. Advertising expenditure may include third-party advertising expenses for marketing. |
Sahay & Pillai (2009Sahay, A., & Pillai, A. (2009). Differential impact of advertising and distribution expenditure on Tobin's Q: A perspective from listed firms in India. Journal of Indian Business Research, 1(2/3), 77-94. https://doi.org/10.1108/17554190911005309 https://doi.org/10.1108/1755419091100530...
) |
Sales and marketing expenses |
Sel
|
Sales and marketing expenses typically include salaries, commissions and benefits for sales and marketing personnel, advertising subsidies for customers, advertising, storage costs, and shipping costs. Sales and marketing expenses include the cost of selling goods, including preparing the goods for sale, such as collection, packaging, storage, and order charges. All shipping and handling costs are recorded as incurred and outgoing freight is not billed to customers. Shipping and handling charges are included in sales charges. |
Sahay & Pillai (2009Sahay, A., & Pillai, A. (2009). Differential impact of advertising and distribution expenditure on Tobin's Q: A perspective from listed firms in India. Journal of Indian Business Research, 1(2/3), 77-94. https://doi.org/10.1108/17554190911005309 https://doi.org/10.1108/1755419091100530...
) |
Control variables |
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Growth |
GROWTH
|
Percentage change in revenue. |
Rangan (1998Rangan, S. (1998). Earnings management and the performance of seasoned equity offerings. Journal of Financial Economics, 50(1), 101-122. https://doi.org/10.1016/S0304-405X(98)00033-6 https://doi.org/10.1016/S0304-405X(98)00...
); Ng & Rezaee (2015Ng, A. C., & Rezaee, Z. (2015). Business sustainability performance and cost of equity capital. Journal of Corporate Finance, 34, 128-149. https://doi.org/10.1016/j.jcorpfin.2015.08.003 https://doi.org/10.1016/j.jcorpfin.2015....
) |
Size |
SIZE
|
Logarithm value of the company’s total assets. |
Jo & Harioto (2011Jo, H., & Harjoto, M. A. (2011). Corporate governance and firm value: the impact of corporate social responsibility. Journal of Business Ethics, 103(3),351-383. https://doi.org/10.1007/s10551-011-0869-y https://doi.org/10.1007/s10551-011-0869-...
); Ng & Rezaee (2015Ng, A. C., & Rezaee, Z. (2015). Business sustainability performance and cost of equity capital. Journal of Corporate Finance, 34, 128-149. https://doi.org/10.1016/j.jcorpfin.2015.08.003 https://doi.org/10.1016/j.jcorpfin.2015....
) |
Leverage |
LEV
|
This is the long-term debt ratio divided by total capital at the end of the fiscal period and is expressed as a percentage. Total capital is the sum of total capital, total debt, and minority interest. |
Opler & Titman (1994Opler, T. C., & Titman, S., (1994). Financial distress and corporate performance. The Journal of Finance, 49(3), 1015-1040. https://doi.org/10.1111/j.1540-6261.1994.tb00086.x https://doi.org/10.1111/j.1540-6261.1994...
); Ng & Rezaee (2015Ng, A. C., & Rezaee, Z. (2015). Business sustainability performance and cost of equity capital. Journal of Corporate Finance, 34, 128-149. https://doi.org/10.1016/j.jcorpfin.2015.08.003 https://doi.org/10.1016/j.jcorpfin.2015....
) |
Liquidity - current ratio |
LIQ
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Represents total current assets divided by total current liabilities. |
Li et al. (2012Li, W. X., Chen, C. C. S., & French, J. J., (2012). The relationship between liquidity, corporate governance, and firm valuation: evidence from Russia. Emerging Markets Review, 13(4), 465-477. https://doi.org/10.1016/j.ememar.2012.07.004 https://doi.org/10.1016/j.ememar.2012.07...
); Wang & Sarkis (2017Wang, Z., & Sarkis, J. (2017). Corporate social responsibility governance, outcomes, and financial performance. Journal of Cleaner Production. 162, 1607-1616. https://doi.org/10.1016/j.jclepro.2017.06.142 https://doi.org/10.1016/j.jclepro.2017.0...
); Ng & Rezaee (2015Ng, A. C., & Rezaee, Z. (2015). Business sustainability performance and cost of equity capital. Journal of Corporate Finance, 34, 128-149. https://doi.org/10.1016/j.jcorpfin.2015.08.003 https://doi.org/10.1016/j.jcorpfin.2015....
) |
Variables |
Symbol |
Description |
Source |
Capital expenditure |
CAPEX
|
Capital expenditures are the funds used by a company to acquire or update physical assets, such as properties, industrial buildings, or equipment, or the amount used over a period to acquire or improve long-term assets, such as properties, facilities, or equipment. |
Laubscher (2002Laubscher, E. R. (2002). A review of the theory of and evidence on the use of the capital asset pricing model to estimate expected share returns. Meditari Accountancy Research, 10(1), 131-146. https://doi.org/10.1108/10222529200200007 https://doi.org/10.1108/1022252920020000...
); Gregoriou, Racicot, & Théoret (2016Gregoriou, G., Racicot. F. É., & Théoret. R. (2016). The q-factor and the Fama and French asset pricing models: Hedge fund evidence. Managerial Finance, 42(12), 1180-1207. https://doi.org/10.1108/MF-01-2016-0034 https://doi.org/10.1108/MF-01-2016-0034...
); Azmat (2014Azmat, Q. U. A. (2014). Firm value and optimal cash level: Evidence from Pakistan. International Journal of Emerging Markets. 9(4). 488-504. https://doi.org/10.1108/IJoEM-11-2011-0104 https://doi.org/10.1108/IJoEM-11-2011-01...
) |
Return on assets |
ROA
|
This amount is calculated as the after-tax income for the fiscal period divided by the total average assets and is expressed as a percentage. Total average assets is the average of total assets at the beginning and end of the year. |
Kamardin (2014Kamardin, H. (2014). Managerial ownership and firm performance: The influence of family directors and non-family directors. In Ethics. Governance and Corporate Crime: Challenges and Consequences (pp. 47-83). Emerald Group Publishing Limited. https://doi.org/10.1108/S2043-052320140000006002 https://doi.org/10.1108/S2043-0523201400...
); Pukthuanthong et al. (2013Pukthuanthong, K., Walker, T. J., Thiengtham, D. N., & Du, H. (2013). Does family ownership create or destroy value? Evidence from Canada. International Journal of Managerial Finance, 9(1), 13-48. https://doi.org/10.1108/17439131311298511 https://doi.org/10.1108/1743913131129851...
) |