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 |