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 earni,t The operation profit in year t dearni,t The change of operation profit between year t and year t − 1. dearni,t+1 The change of operation profit between year t + 1 and year t dnai,t The change of net assets (total assets minus cash holdings) between year t and year t − 1 dnai,t+1 The change of net assets between year t + 1 and year t interi,t Interest expenses in year t (since the data can’t available, this paper replaces it with financial expenses) dinteri,t The change of interest expenses between year t and year t − 1 dinteri,t+1 The change of interest expenses between year t + 1 and year t Variable Definition dividi,t The cash dividend in year t ddividi,t The change of cash dividend between year t and year t − 1 ddividi,t+1 The change of cash dividend between year t + 1 and year t capexi,t 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. dcapexi,t The change of capital expenditure between year t and year t − 1 dcapexi,t+1 The change of capital expenditure between year t + 1 and year t dmvi,t+1 The change of MV between year t + 1 and year t ind Industry dummy variables year Year dummy variables