| Variables | Description |
| Main Variables of Interest: |
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| VAIC | VA (Value Added) is defined as the profit before income tax and extraordinary items and other adjustments plus the total salaries and employee benefits: RIAD4301 + RIAD4135. CA is the book value of assets in a firm. VAIC = HCE + RCE + SCE. |
| HCE | This variable is the human capital efficiency component of VAIC which is calculated based on the overall payroll expenses: RIAD4135. HCE = VA/HC. |
| RCE | This variable is the relational capital efficiency component of VAIC. RCE = VA/CA. |
| SCE | This variable is the structural capital efficiency component of VAIC. SCE = SC/VA. |
| SC | This variable is the structure capital component of intellectual capital. SC = VA − HC. |
| VA | This variable is the difference between a firm’s total output and total input. |
| CA | This variable is the book value of both physical and financial net assets in an organization. |
| UNCAP | This variable equals to 1 when the tier 1 risk-based capital ratio is under 4% (before 1990) or the total risk-based ratio is under 8% (after 1990), 0 otherwise. |
| FNMR | This variable is the average proportion of banks failed in the state in a given year. |
| ZSCORE | This variable is defined as the return on assets plus capital asset ratio, divided by the standard deviation of return on assets. |
| ZSCORENEG | This variable is the negative values of ZSCORE. |
| ALLP | This variable is the ratio of the allowance of loan loss provisions divided by nonperforming loans. |
| WD | This variable is wholesale funds scaled by total assets. Wholesale funds are calculated by subtracting core deposits from total liabilities where core deposits are the sum of transaction deposits, saving deposits, and time deposits less than $100,000: RCON2215 + RCON6810 + RCON0352 + RCON6648. |
| Firm-Level Bank-Specific Controls: |
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| TIER1 | This variable is the ratio of Tier 1 capital to total risk-weighted assets. |
| ROA | This variable is the ratio of net income to total assets. |
| LIQUIDITY | This variable is the ratio of cash to total assets. |
| NPL | This variable is the ratio of nonperforming loans to total loans. |
| CI | This variable is the ratio of commercial and industrial loans to total loans. |
| LOANS/DEP | This variable is the ratio of total loans to total deposits. |
| SIZE | This variable is the natural logarithm of total assets. |
| Macroeconomic Controls: |
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| GDPPC | This variable is the natural logarithm of the levels of gross domestic products per capita by state. Data source: The national income and product accounts can be obtained from the Economic Research Federal Reserve Bank of St. Louis website at: https://research.stlouisfed.org/. |