Variable definition
| Variable | Definition |
|---|---|
| Dependent variables | |
| LnSGA | Change in company expenses, which is equal to the natural logarithm of the ratio of the company's current year to the previous year's selling, general and administrative expenses |
| Independent variables | |
| LnIncome | Change in revenue, which is equal to the natural logarithm of the ratio of the company's current year to the previous year's revenue |
| D | Dummy variable that indicates whether the company's revenue has decreased. If the company's revenue in the current year has decreased compared to the previous year, it takes the value of 1, and 0 otherwise |
| Treat | Dummy variable for the company in the treatment group, which takes the value of 1 if the company is listed on the SSE, and 0 otherwise |
| Post | Dummy variable for the affected year, which takes the value 1 if the observation year is in 2013 and beyond, and 0 otherwise |
| Moderator variables | |
| MKI | Marketization index, which is derived from the China Marketization Index compiled by Wang et al. (2019) |
| HHI | Herfindahl Index, which is calculated by summing the squares of the market shares of all firms in an industry |
| Follow | Analyst follow, which is the natural logarithm of the total number of analyst reports published on the company plus one at year end |
| CF | Cash flow level, which is the net cash flow from operations divided by total assets |
| Control variables | |
| D_Twoyear | Dummy variable indicating whether the company's revenue has declined for two consecutive years. If it has, then the value is 1, and 0 otherwise |
| Eco_Growth | Economic growth variable, which is equal to the national GDP growth rate of the current year relative to the previous year |
| Employ_Inten | Human capital intensity variable (Employ_Inten), which is equal to the ratio of the total number of employees to the revenue (in million yuan) at the end of the year |
| Asset_Inten | Fixed capital intensity variable (Asset_Inten), which is equal to the ratio of the company's total assets at the end of the year to the same year's revenue |
| ROA | Profitability, which is defined as the firm's net income divided by its total assets at year end |
| Lev | Financial leverage, which is defined as a firm's total liabilities divided by total assets at year end |
| Firsthold | Shareholding ratio of the largest shareholder, which is the proportion of shares held by the firm's largest shareholder at year end |
| Ind | Ratio of independent directors, which is equal to a firm's number of independent directors divided by the total number of board directors at year end |
| Dual | Duality of chairman and CEO dummy variable, which is equal to 1 if the chairman and CEO of a firm are the same person, and 0 otherwise |
| Mshare | Management shareholding ratio, which is equal to the proportion of shares held by the firm's management at year end |
| Industry | Industry dummy variable, industries are based on the CSRC's one-digit industry code for nonmanufacturing firms and two-digit industry code for manufacturing firms |
| Year | Year dummy variable, which sets dummy variable for the year corresponding to the observation |
| Variable | Definition |
|---|---|
| Change in company expenses, which is equal to the natural logarithm of the ratio of the company's current year to the previous year's selling, general and administrative expenses | |
| Change in revenue, which is equal to the natural logarithm of the ratio of the company's current year to the previous year's revenue | |
| Dummy variable that indicates whether the company's revenue has decreased. If the company's revenue in the current year has decreased compared to the previous year, it takes the value of 1, and 0 otherwise | |
| Dummy variable for the company in the treatment group, which takes the value of 1 if the company is listed on the SSE, and 0 otherwise | |
| Dummy variable for the affected year, which takes the value 1 if the observation year is in 2013 and beyond, and 0 otherwise | |
| Marketization index, which is derived from the China Marketization Index compiled by | |
| Herfindahl Index, which is calculated by summing the squares of the market shares of all firms in an industry | |
| Analyst follow, which is the natural logarithm of the total number of analyst reports published on the company plus one at year end | |
| Cash flow level, which is the net cash flow from operations divided by total assets | |
| Dummy variable indicating whether the company's revenue has declined for two consecutive years. If it has, then the value is 1, and 0 otherwise | |
| Economic growth variable, which is equal to the national GDP growth rate of the current year relative to the previous year | |
| Human capital intensity variable ( | |
| Fixed capital intensity variable ( | |
| Profitability, which is defined as the firm's net income divided by its total assets at year end | |
| Financial leverage, which is defined as a firm's total liabilities divided by total assets at year end | |
| Shareholding ratio of the largest shareholder, which is the proportion of shares held by the firm's largest shareholder at year end | |
| Ratio of independent directors, which is equal to a firm's number of independent directors divided by the total number of board directors at year end | |
| Duality of chairman and CEO dummy variable, which is equal to 1 if the chairman and CEO of a firm are the same person, and 0 otherwise | |
| Management shareholding ratio, which is equal to the proportion of shares held by the firm's management at year end | |
| Industry dummy variable, industries are based on the CSRC's one-digit industry code for nonmanufacturing firms and two-digit industry code for manufacturing firms | |
| Year dummy variable, which sets dummy variable for the year corresponding to the observation | |
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