Page 48 - CITN 2017 Journal

shown.

Table 3: Descriptive statistics

N Mean Median Std. Deviation Minimum Maximum
SMP 470 9.686 6.288 9.531 0.139 71.650
BVS 470 4.239 3.038 4.066 -0.342 19.538
EPS 470 0.568 0.433 0.996 -9.349 4.794
ENVS 470 78.768 17.221 19.620 94.680
85.315
Valid N 470

Source: Author's Computation, 2015

As seen in table 3, for the sampled firms over the 5 year period, the mean share market price
(SMP) is more than twice the book value per share (BVS). The large difference between
SMP and BVS indicates that investors have better expectations about the future earnings of
the companies in the sample. However, it could also mean that the company shares are
overvalued because the market is bullish. SMP also shows a larger dispersion compared to
BVS. Some of the companies in the sample posts negative BVS and EPS during the period;
the negative EPS were seen mostly among the companies in the financial sector. The
standard deviation of ENVS is largest among the variables in the model showing a larger
spread in the observed values; thus, there are more high environmental performers that low
environmental performers.

Table 4: Pearson Correlation

SMP BVS EPS ENVSCORE
SMP 1.000 .661 .552 .120
BVS .661 1.000 .356 .226
EPS .552 .356 1.000 .086
ENVS .120 .226 .086 1.000

Source: Author's Computation, 2015

Table 4 provides the correlation coefficients between the explanatory variables in the
model. The statistics shows a positive correlation among all the variables. For the
dependent variable BVS and EPS have the highest positive correlation with the
independent variable SMP. The financial variables BVS and EPS shows also have
significantly positive correlation. The variable ENVS is positively associated with the
other variables in the model; however it has the highest correlation with book value per
share. Though this explains the movement in the variables; however, it does not explain
what causes the movement in the variables.

4.1 Test of hypothesis One
It is advocated that financial performance alone cannot explain market values, because
many share market participants today carefully assess potential investments both on
financial and environmental performance criteria. The regression model after including
environmental performance score (ENVS) as a third independent variable is given as;

SMP = β + β BVS + β EPS + β ENVS + ε ...............................................(3)
i,t 0 1 i, t 2 i, t 3 i,t i, t

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