Variable definitions
| Variables | Definitions | Calculation methods |
|---|---|---|
| Patents | Number of patent applications | The sum of invention, utility model and industrial design patent applications plus 1 and take the natural logarithm |
| SO | Whether to implement stock options | The value is 1 when the company implements stock options, otherwise, it is 0 |
| Post | Before and after the year of implementation | The value is 1 when the year is after implementation, otherwise, it is 0 |
| Delta | Option stock price sensitivity | The first derivative of the option value to stock price |
| Vega | Option stock price volatility sensitivity | The first derivative of the option value to stock price volatility |
| R&D | R&D investment | R&D investment/operating income |
| Grow | Growth of the company | Total assets/market value |
| Roe | Return on equity | Net profit/owner’s equity |
| Exe_own | Executive shareholding | The ratio of shares held by senior management to the total share capital |
| State | Nature of control | The value is 1 when the final controller is state-owned, otherwise, it is 0 |
| Dual | Duality | The value is 1 when the chairman is also the manager, otherwise, it is 0 |
| Cash | Cash assets ratio | Cash and cash equivalents at the end of the period/total assets |
| Size | Firm size | The natural logarithm of the company’s total assets |
| Hhl5 | Equity concentration | The sum of the squares of the company’s top 5 shareholders |
| Tech | High-tech industry | According to the 2012 industry classification standards of the China Securities Regulatory Commission and the “key high-tech fields supported by the state”, it is 1 if it is a high-tech industry, otherwise, it is 0 |
| Patent_growth | Patent growth rate | The growth rate of patent applications in the past three years |
| Non | Non-executive granting proportion | Number of stock options granted to non-executives/total number of stock options |
| Range | Granting range | Total number of shares granted/total number of company shares |
| T | Incentive period | The value is 1 if the incentive period is greater than or equal to five years, otherwise, it is 0 |
| Exep | Exercise proportion | The value is 1 when the exercise proportion increases year by year, otherwise, it is 0 |
| Premium | Price-to-strike ratio | The opening price of the stock in the year of granting/exercise price |
| Perf | Performance assessment criteria | The value is 1 when any performance assessment criteria are greater than the value of any of the previous three years or greater than the mean of the previous three years, otherwise, it is 0 |
| Variables | Definitions | Calculation methods |
|---|---|---|
| Number of patent applications | The sum of invention, utility model and industrial design patent applications plus 1 and take the natural logarithm | |
| Whether to implement stock options | The value is 1 when the company implements stock options, otherwise, it is 0 | |
| Before and after the year of implementation | The value is 1 when the year is after implementation, otherwise, it is 0 | |
| Option stock price sensitivity | The first derivative of the option value to stock price | |
| Option stock price volatility sensitivity | The first derivative of the option value to stock price volatility | |
| R&D investment | R&D investment/operating income | |
| Growth of the company | Total assets/market value | |
| Return on equity | Net profit/owner’s equity | |
| Executive shareholding | The ratio of shares held by senior management to the total share capital | |
| Nature of control | The value is 1 when the final controller is state-owned, otherwise, it is 0 | |
| Duality | The value is 1 when the chairman is also the manager, otherwise, it is 0 | |
| Cash assets ratio | Cash and cash equivalents at the end of the period/total assets | |
| Firm size | The natural logarithm of the company’s total assets | |
| Equity concentration | The sum of the squares of the company’s top 5 shareholders | |
| High-tech industry | According to the 2012 industry classification standards of the China Securities Regulatory Commission and the “key high-tech fields supported by the state”, it is 1 if it is a high-tech industry, otherwise, it is 0 | |
| Patent growth rate | The growth rate of patent applications in the past three years | |
| Non-executive granting proportion | Number of stock options granted to non-executives/total number of stock options | |
| Granting range | Total number of shares granted/total number of company shares | |
| Incentive period | The value is 1 if the incentive period is greater than or equal to five years, otherwise, it is 0 | |
| Exercise proportion | The value is 1 when the exercise proportion increases year by year, otherwise, it is 0 | |
| Price-to-strike ratio | The opening price of the stock in the year of granting/exercise price | |
| Performance assessment criteria | The value is 1 when any performance assessment criteria are greater than the value of any of the previous three years or greater than the mean of the previous three years, otherwise, it is 0 |
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