Variable | Definition | |

Explained Variable | mv | Firm value, MV = (market value of equity + book value of debt)/book value of assets |

Explanatory Variables | cash | Cash holdings, Cash = (cash and short-term investment or tradable securities)/total assets |

state | Dummy variable, if the ultimate controller is government, it equals 1, otherwise is 0. | |

central | Dummy variable, if the ultimate controller is central government, it equals 1, otherwise is 0. | |

agency | Agent cost, agency = administrative expenses/total assets | |

fc | Financial constraint index, fc equals one if firms labeled financial constraint. | |

Control Variables | earn | The operation profit in year t |

dearn | The change of operation profit between year t and year t − 1. | |

dearn | The change of operation profit between year t + 1 and year t | |

dna | The change of net assets (total assets minus cash holdings) between year t and year t − 1 | |

dna | The change of net assets between year t + 1 and year t | |

inter | Interest expenses in year t (since the data can’t available, this paper replaces it with financial expenses) | |

dinter | The change of interest expenses between year t and year t − 1 | |

dinter | The change of interest expenses between year t + 1 and year t | |

Variable | Definition | |

| divid | The cash dividend in year t |

ddivid | The change of cash dividend between year t and year t − 1 | |

ddivid | The change of cash dividend between year t + 1 and year t | |

capex | Capital expenditure in year t, it equals cash paid to acquire fixed assets, intangible assets and other long-term assets minus cash received from disposal fixed assets ,intangible assets and other long-term assets in year t. | |

dcapex | The change of capital expenditure between year t and year t − 1 | |

dcapex | The change of capital expenditure between year t + 1 and year t | |

dmv | The change of MV between year t + 1 and year t | |

ind | Industry dummy variables | |

year | Year dummy variables |