Description of the variables
| Variable | Definition | Expected sign on rating | Source |
|---|---|---|---|
| Dependent variables | |||
| Leverage1 | Total debt to total assets | Orbis | |
| Rating | Ordinal variable with seven thresholds from 1–7 depending on the rating score given by S&P | Eikon | |
| Gender variables | |||
| Femaleboard | Percentage of women on the board | + | Eikon |
| Bequitable | Dummy variable equal to 1 if there are at least two women on the board | + | Eikon |
| Corporate governance variables | |||
| Boardindep | Percentage of independent directors on the board | + | Eikon |
| Duality | Dummy variable that takes a value of 1 if the CEO also serves as chairperson and 0 otherwise | − | Eikon |
| Company fundamentals and control variables | |||
| Interestcoverage | EBIT to interest expense | + | Orbis |
| Loss | Dummy that takes a value of 1 if ROA is negative in the current and previous year | − | Orbis |
| Tangibility | Fixed to total assets | + | Orbis |
| ROA | EBIT to total assets | + | Orbis |
| Size | Napierian logarithm of net sales | + | Orbis |
| MtB | Market value of the share to its book value | + | Eikon |
| Audit | Dummy that takes a value of 1 for firms with a favourable report | + | Eikon |
| Financial | Dummy equal to 1 for financial companies | Orbis | |
| Grade2 | Dummy that takes a value of 1 for rating values over BB+ and zero otherwise | Eikon | |
| Variable | Definition | Expected sign on rating | Source |
|---|---|---|---|
| Total debt to total assets | Orbis | ||
| Ordinal variable with seven thresholds from 1–7 depending on the rating score given by S&P | Eikon | ||
| Percentage of women on the board | + | Eikon | |
| Dummy variable equal to 1 if there are at least two women on the board | + | Eikon | |
| Percentage of independent directors on the board | + | Eikon | |
| Dummy variable that takes a value of 1 if the CEO also serves as chairperson and 0 otherwise | − | Eikon | |
| EBIT to interest expense | + | Orbis | |
| Dummy that takes a value of 1 if ROA is negative in the current and previous year | − | Orbis | |
| Fixed to total assets | + | Orbis | |
| EBIT to total assets | + | Orbis | |
| Napierian logarithm of net sales | + | Orbis | |
| Market value of the share to its book value | + | Eikon | |
| Dummy that takes a value of 1 for firms with a favourable report | + | Eikon | |
| Dummy equal to 1 for financial companies | Orbis | ||
| Dummy that takes a value of 1 for rating values over BB+ and zero otherwise | Eikon | ||
Note(s): 1This is also an independent variable for H2 and H3; the expected sign for H2 and H3 is negative. 2Grade is used for H1
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