Variables for the Study

Types of VariablesVariableOperationalizationSource
Dependent VariableMarket sharePercentage of sales revenue as compared with total sales revenue in an industry at four-digit SIC levelCompustat
Independent VariableCorporate social responsibility activities (summation of community and environment score)CSR strength minus CSR concernsKLD database
Moderating VariableAdvertising intensityAdvertising expenditure divided by salesCompustat
Control VariableLeverageTotal long-term debt divided by total assetCompustat
Advertising intensityAdvertising expenditure divided by salesCompustat
R&D intensityR&D expenditure divided by salesCompustat
Economic growthGross domestic productFederal Reserve Bank of St. Louis website
Instrumental VariablesBlue and red states (Dummy variable)1 if the company's headquarters are located in a blue state, and 0
VotingThe average margin of victory in the five presidential elections between 1992 and 2008 for the democratic president candidate in the state where company i's headquarters is
  • Note: CSR = corporate social responsibility; R&D = research and development.