Variable definitions
| Variable name | Definition |
|---|---|
| Normalized disclosure score of debt-covenant-related APMS | Normalized disclosure score of a firm’s debt covenant-related APMs on a continuous [0, 1] scale across all firms in the same industry-year group. Higher disclosure scores indicate greater disclosure of debt covenant-related APMs relative to peer firms in the same industry-year group |
| Normalized disclosure score of efficiency-related APMS | Normalized disclosure score of a firm’s efficiency-related APMs on a continuous [0, 1] scale across all firms in the same industry-year group. Higher disclosure score indicate greater disclosure of efficiency-related APMs relative to peer firms in the same industry-year group |
| Raw disclosure score of Debt-Covenant-Related APMS | Raw disclosure score of a firm’s debt covenant-related APMs calculated as the average of twenty debt covenant-related APMs indicators |
| Raw disclosure score of efficiency-related APMS | Raw disclosure score of a firm’s efficiency-related APMs calculated as the average of eight efficiency-related APMs indicators |
| DCDHigh&ERDLow | A dummy coded 1 (0 otherwise) if a firm’s debt covenant-related APM disclosure score (DCD) in a given year is above the industry-year median and its efficiency-related APM disclosure score (ERD) is below the industry-year median |
| DCDLow&ERDHigh | A dummy coded 1 (0 otherwise) if a firm’s debt covenant-related APM disclosure score in a given year is below the industry-year median and its efficiency-related disclosure of APMs is above the industry-year median |
| Divestments | A firm’s total (Deal)value of disinvestments per year |
| Leverage | Long term debt divided by total assets |
| Loss | Dummy variable that is equal to one if the firm reported a loss during the year, and zero otherwise |
| Size | Natural logarithm of the firm's year‐end total assets |
| Market-to-book | Natural logarithm of the market to book ratio |
| Sales growth | The annual change in sales divided by a firm’s prior year’s annual sales |
| BIG4 | Dummy variable that is equal to one if the firm is audited by a Big 4 auditor, and 0 otherwise |
| Institutional investors | Percentage of a company's shares owned by institutions (Lewellen and Lewellen, 2022) |
| Firm age | Natural logarithm of the total number of years since a firm’s incorporation plus one |
| Law and Enforcement | Composite proxy measured as the principal component of scores on five legal and enforcement efficiency dimensions: government effectiveness, regulatory quality, rule of law, control of corruption, and public and private enforcement (Djankov et al., 2008; Isidro and Marques, 2015) |
| Investor protection | Measure of the level of protection of minority shareholders’ rights (Djankov et al., 2008) |
| Variable name | Definition |
|---|---|
| Normalized disclosure score of debt-covenant-related | Normalized disclosure score of a firm’s debt covenant-related APMs on a continuous [0, 1] scale across all firms in the same industry-year group. Higher disclosure scores indicate greater disclosure of debt covenant-related APMs relative to peer firms in the same industry-year group |
| Normalized disclosure score of efficiency-related | Normalized disclosure score of a firm’s efficiency-related APMs on a continuous [0, 1] scale across all firms in the same industry-year group. Higher disclosure score indicate greater disclosure of efficiency-related APMs relative to peer firms in the same industry-year group |
| Raw disclosure score of Debt-Covenant-Related | Raw disclosure score of a firm’s debt covenant-related APMs calculated as the average of twenty debt covenant-related APMs indicators |
| Raw disclosure score of efficiency-related | Raw disclosure score of a firm’s efficiency-related APMs calculated as the average of eight efficiency-related APMs indicators |
| A dummy coded 1 (0 otherwise) if a firm’s debt covenant-related | |
| A dummy coded 1 (0 otherwise) if a firm’s debt covenant-related | |
| Divestments | A firm’s total (Deal)value of disinvestments per year |
| Leverage | Long term debt divided by total assets |
| Loss | Dummy variable that is equal to one if the firm reported a loss during the year, and zero otherwise |
| Size | Natural logarithm of the firm's year‐end total assets |
| Market-to-book | Natural logarithm of the market to book ratio |
| Sales growth | The annual change in sales divided by a firm’s prior year’s annual sales |
| BIG4 | Dummy variable that is equal to one if the firm is audited by a Big 4 auditor, and 0 otherwise |
| Institutional investors | Percentage of a company's shares owned by institutions ( |
| Firm age | Natural logarithm of the total number of years since a firm’s incorporation plus one |
| Law and Enforcement | Composite proxy measured as the principal component of scores on five legal and enforcement efficiency dimensions: government effectiveness, regulatory quality, rule of law, control of corruption, and public and private enforcement ( |
| Investor protection | Measure of the level of protection of minority shareholders’ rights ( |
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