PurposeThe purpose of this study is to examine the effect of carbon emission on accounting and market-based financial performance of Indian companies.Design/methodology/approachFirms reporting emission data on Carbon Disclosure Project (CDP) are considered for empirical analysis and the data have been collected for the period from 2013 to 2019. The study adopts Heckman's regression model to control for self-selection bias and it also examines the moderating role of environmental sensitivity through industry-wise analysis. The results are also checked for potential endogeneity using generalized methods of moments estimation.FindingsPrimarily, the findings postulate a significant negative impact of carbon emissions on both measures of financial performance. Further, it also determines that environmentally sensitive firms are more exposed to such negative influence of emission compared to nonsensitive companies.Research limitations/implicationsCurrent research will enhance the understanding of managers about the economic impact of carbon emission, especially in an economy where emissions are not completely regulated. The study provides an economic rationale to the industries to reduce emission volume. It will also assist regulators to draft environmental policies by considering environmental sensitivity. It should be noted that the study is based on the Indian firms that have reported emission data on the CDP during the study period.Originality/valueThe present study addresses one of the most important but less explored issues of environmental research in one of the largest emerging economies of the South Asian region. The study presents a comprehensive view by covering accounting as well as market-based indicators along with the moderating effect of environmental sensitivity.

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Present research paper examines the determinants of capital structure decision of Indian food processing industry and assesses the moderating effect of firm size on this relationship. Using financial data of 40 firms for 10 years (2009-10 to 2018-19), panel least square regression analysis has been performed for data analysis. Based on regression results, the study concludes tangibility, tax rate, and cash flow as significant determinants of long-term borrowing for overall sample firms. On the other hand, tangibility, liquidity and profitability are significant factors affecting short-term borrowings of selected companies. Further, the study confirms that size of the firm moderates the effect of selected determinants on debt ratio of different categories of firms. It is, further, found that small size firms employ more debt with increasing profitability whereas medium and large size firms tend to reduce their debt levels with increasing profitability. The research findings will enhance understanding of capital structure determinants by probing the moderating impact of company size on it. The findings will be helpful to corporate managers in forming their borrowing strategies based on the relative size. Further, they can identify important factors to be considered while choosing debt or equity or in case of debt either short term or long term.

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