Table II Definitions of variables... | Emerald Publishing

Table II

Definitions of variables

Variables	Definitions	Sources
Dependent variables
$\| {\overset{⌢}{β}}_{2 i j t} \|$	Absolute value of exposure to country risks estimated from equation (7.1) of firm i located in country j in year t	Authors’ estimation
$\| {\overset{⌢}{β}}_{3 i j t} \|$	Absolute value of exposure exchange rate risks estimated from equation (7.2) of firm i located in country j in year t	Authors’ estimation
$\| {\overset{⌢}{β}}_{4 i j t} \|$	Absolute value of exposure to interest rate risks estimated from equation (7.3) of firm i located in country j in year t	Authors’ estimation
Main independent variables
DER	General derivative intensity (notional value of derivatives contracts in thousand US$/total assets)	Authors’ calculation
FCD	Foreign currency derivative intensity (notional value of FC derivatives contracts in thousand US$/total assets)	Authors’ calculation
IRD	Interest rate derivative intensity (notional value of IR derivatives contracts in thousand US$/total assets)	Authors’ calculation
Control variables
Firm size	Natural logarithm of market value of total assets scaled by producer price index (PPI)	Datastream
Leverage	Total debt to total assets	Datastream
FORSALES	Foreign sales to total sales	Datastream
Diversification indicator	Dummy variable which equals one for firms operating in more than one business segment in the SIC industry classification, and zero otherwise	Authors’ construction
GDP per capita	(Gross domestic products (GDP)/mid-year population)	World Bank
Financial system deposits to GDP	The demand, time, saving deposits in deposit money banks and other financial institutions as a share of GDP	World Bank
Rule of law	Index measuring the confidence of agents in and abide by the rules of society, the quality of contract enforcement, property rights with −2.5 (weak) to 2.5 (strong)	World Bank

Variables	Definitions	Sources
Dependent variables
$\| {\overset{⌢}{β}}_{2 i j t} \|$	Absolute value of exposure to country risks estimated from equation (7.1) of firm i located in country j in year t	Authors’ estimation
$\| {\overset{⌢}{β}}_{3 i j t} \|$	Absolute value of exposure exchange rate risks estimated from equation (7.2) of firm i located in country j in year t	Authors’ estimation
$\| {\overset{⌢}{β}}_{4 i j t} \|$	Absolute value of exposure to interest rate risks estimated from equation (7.3) of firm i located in country j in year t	Authors’ estimation
Main independent variables
DER	General derivative intensity (notional value of derivatives contracts in thousand US$/total assets)	Authors’ calculation
FCD	Foreign currency derivative intensity (notional value of FC derivatives contracts in thousand US$/total assets)	Authors’ calculation
IRD	Interest rate derivative intensity (notional value of IR derivatives contracts in thousand US$/total assets)	Authors’ calculation
Control variables
Firm size	Natural logarithm of market value of total assets scaled by producer price index (PPI)	Datastream
Leverage	Total debt to total assets	Datastream
FORSALES	Foreign sales to total sales	Datastream
Diversification indicator	Dummy variable which equals one for firms operating in more than one business segment in the SIC industry classification, and zero otherwise	Authors’ construction
GDP per capita	(Gross domestic products (GDP)/mid-year population)	World Bank
Financial system deposits to GDP	The demand, time, saving deposits in deposit money banks and other financial institutions as a share of GDP	World Bank
Rule of law	Index measuring the confidence of agents in and abide by the rules of society, the quality of contract enforcement, property rights with −2.5 (weak) to 2.5 (strong)	World Bank

Note: This table defines the dependent and independent variables, and control variables that we examine