Definitions of the variables
| Type of variable | Variable name | Variable symbol | Definitions |
|---|---|---|---|
| Dependent variable | Management tone manipulation | AbTone | The net value of the residual term of the model (1) |
| Independent variable | Exit threat | ET | The interaction between blockholder competition and stock liquidity |
| Control variables | Company size | Size | The natural logarithm of the total assets at the year end |
| Solvency | Lev | Total debt at year end/Total asset at year end | |
| Profitability | ROA | The return on assets, net income divided by average total assets | |
| Operating cash flow | OCF | The amount of operating cash flow deflated by lagged total assets | |
| Company growth | Growth | Increase of main business income in this period/Main business income of last year | |
| Accrual surplus management | DA | Manipulable accrual profits calculated from the Modified Jones Model and taken in absolute terms | |
| book-to-market ratio | BM | Total assets/market value | |
| Company age | Age | The natural logarithm of the number of years a firm has been listed on the Shenzhen and Shanghai stock exchanges | |
| Proportion of independent directors | Dir | The percentage of independent directors on the board | |
| Duality | Dual | A dummy variable that equals 1if the chairman is also the general manager, and 0 otherwise | |
| Shareholding ratio of the largest shareholder | Top1 | Number of shares held by the largest shareholder/total share capital | |
| Shareholding ratio of institutional investors | Inst | Number of shares held by institutional investors/total share capital | |
| Whether the four major audits | Big4 | A dummy variable that equals 1 if it is audited by the four major accounting firms, and 0 otherwise | |
| Annual-fixed effects | Year | Annual-fixed effects | |
| Industry-fixed effect | Industry | Industry-fixed effect |
| Type of variable | Variable name | Variable symbol | Definitions |
|---|---|---|---|
| Dependent variable | Management tone manipulation | The net value of the residual term of the model (1) | |
| Independent variable | Exit threat | The interaction between blockholder competition and stock liquidity | |
| Control variables | Company size | The natural logarithm of the total assets at the year end | |
| Solvency | Total debt at year end/Total asset at year end | ||
| Profitability | The return on assets, net income divided by average total assets | ||
| Operating cash flow | The amount of operating cash flow deflated by lagged total assets | ||
| Company growth | Increase of main business income in this period/Main business income of last year | ||
| Accrual surplus management | Manipulable accrual profits calculated from the Modified Jones Model and taken in absolute terms | ||
| book-to-market ratio | Total assets/market value | ||
| Company age | The natural logarithm of the number of years a firm has been listed on the Shenzhen and Shanghai stock exchanges | ||
| Proportion of independent directors | The percentage of independent directors on the board | ||
| Duality | A dummy variable that equals 1if the chairman is also the general manager, and 0 otherwise | ||
| Shareholding ratio of the largest shareholder | Number of shares held by the largest shareholder/total share capital | ||
| Shareholding ratio of institutional investors | Number of shares held by institutional investors/total share capital | ||
| Whether the four major audits | A dummy variable that equals 1 if it is audited by the four major accounting firms, and 0 otherwise | ||
| Annual-fixed effects | Annual-fixed effects | ||
| Industry-fixed effect | Industry-fixed effect |
Note(s): This table provides the names, symbols and definitions of the main variables used in this study. The specific calculation methods and sources for explanatory and control variables are detailed in the definitions column
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