Variable description
| Definition | |
|---|---|
| EBIT/TA | (Income before extraordinary items plus interest expense plus income taxes)/total assets |
| M2B | Market to book ratio= (total liabilities plus equity value)/total assets |
| Depreciation | (Depreciation and amortization)/total assets |
| Size | Natural logarithm of total assets |
| Tangibility | Net property plant, and equipment/total assets |
| R&D/TA | Research and development expense/total assets; missing values are set to 0 |
| R&D Dummy | If R&D expense is reported, 0 otherwise |
| Ind Median Book Lev | Without firm self’s two-digit industry median of book leverage ratio |
| Ind Median Market Lev | Without firm self’s two-digit industry median of market leverage ratio |
| Debt | Total debt = Debt in current liabilities + total long-term debt |
| Market value | Market value = stock price*common shares outstanding |
| Book Lev | Debt/total asset |
| Book Dev | Book target ratio minus the book leverage ratio from the previous quarter |
| Book Target | Target book leverage ratio, estimated by Faulkender et al. (2012) model |
| Market Lev | Debt/(debt + market value) |
| Market Dev | Market target ratio minus the market leverage from the previous quarter |
| Market Target | Target market leverage ratio, estimated by Faulkender et al. (2012) model |
| NPND | Firms with the sum of long-term debt plus debt in current liabilities less cash and short-term investment equal to or less than 0 |
| Dividend Payout | Is a dummy variable set to 1 if the firm paid dividend in a given quarter, 0. Otherwise |
| Investment tax credit | Represents deferred taxes and investment tax credit and it is set to 1 if the firm received the incentive in a given quarter, 0 otherwise |
| Covid Exposure | Covid-19 Exposure is a measure of conversations about the overall degree of risk and Covid-19 exposure the firm faces using a textual analysis—by counting the number of synonyms for risk or uncertainty or words related to exposure to the pandemic found in the quarterly earnings conference transcript (Hassan et al., 2020) |
| Covid Risk | See Hassan et al. (2020) |
| Ln (RISK) | The log form of the firm’s overall risk. The data is obtained from Hassan et al.'s (2020). It is a measure of overall firm-level risk simply counts the frequency of mentions of synonyms for risk or uncertainty and divides by the length of the transcript |
| Definition | |
|---|---|
| EBIT/TA | (Income before extraordinary items plus interest expense plus income taxes)/total assets |
| M2B | Market to book ratio= (total liabilities plus equity value)/total assets |
| Depreciation | (Depreciation and amortization)/total assets |
| Size | Natural logarithm of total assets |
| Tangibility | Net property plant, and equipment/total assets |
| R&D/TA | Research and development expense/total assets; missing values are set to 0 |
| R&D Dummy | If R&D expense is reported, 0 otherwise |
| Ind Median Book Lev | Without firm self’s two-digit industry median of book leverage ratio |
| Ind Median Market Lev | Without firm self’s two-digit industry median of market leverage ratio |
| Debt | Total debt = Debt in current liabilities + total long-term debt |
| Market value | Market value = stock price*common shares outstanding |
| Book Lev | Debt/total asset |
| Book Dev | Book target ratio minus the book leverage ratio from the previous quarter |
| Book Target | Target book leverage ratio, estimated by |
| Market Lev | Debt/(debt + market value) |
| Market Dev | Market target ratio minus the market leverage from the previous quarter |
| Market Target | Target market leverage ratio, estimated by |
| NPND | Firms with the sum of long-term debt plus debt in current liabilities less cash and short-term investment equal to or less than 0 |
| Dividend Payout | Is a dummy variable set to 1 if the firm paid dividend in a given quarter, 0. Otherwise |
| Investment tax credit | Represents deferred taxes and investment tax credit and it is set to 1 if the firm received the incentive in a given quarter, 0 otherwise |
| Covid Exposure | Covid-19 Exposure is a measure of conversations about the overall degree of risk and Covid-19 exposure the firm faces using a textual analysis—by counting the number of synonyms for risk or uncertainty or words related to exposure to the pandemic found in the quarterly earnings conference transcript ( |
| Covid Risk | See |
| Ln (RISK) | The log form of the firm’s overall risk. The data is obtained from |
Source(s): Table by authors