Variable

Definition

Executive Compensation

LnCEOpay

Natural log of total compensation of the top three executives

Performance

LnNI

Natural log of net income

LnOP

Natural log of operating profit

Foreign Experience

FE

Equal to 1 if there is at least one director with foreign experience in the board

Size

LnSize

Natural log of operating income

Leverage

Leverage

The ratio of long-term debt to total asset.

Ownership Concentration

Lshare

The portion of shares hold by the largest shareholder

Duality

Duality

Equal to 1 if a firm’s CEO also serves as chairman of boar

Board independence

Indd

The percentage of board members who are outsiders

Region

Central

Equal to 1 for companies registered in the central China

West

Equal to 1 for companies registered in the western China

Industry

Ind

Industry dummy variables

Year

Year

Year dummy variables