Variable

Description

m_it

Natural log-difference of M_it, where M_it is computed as liquid asset subtracting the sum of inventory and accounts receivable for firm i at the end of year t, as shown in [8] .

y_it

Natural log-difference of total sales for firm i at the end of year t.

w_it

Natural log-difference of W_it, where W_it is measured as the total payroll (given by “total wages payable”), divided by the number of employees for firm i at the end of year t.

r_it

Natural log-difference of R_it where R_it is computed as the total financial expenditures divided by the total debt (given by “total liabilities”) for firm i at the end of year t, as shown in [9] .