Table A1. Market valuation and corporate... | Emerald Publishing

Table A1.

Market valuation and corporate investment – description of variables

Variables	Symbol	Definition	Source
Investment	I	The ratio of net addition of fixed capital to total assets	Computed from CMIE Prowess Database
Market to Book Ratio	MB	The ratio of total assets minus book equity plus market capitalization all divided by total assets.	Computed from CMIE Prowess Database
Mispricing at the firm level	FDev	Difference between Observed market price at time t and fundamental value at time t [lnMit -v(θit;αt)]	Computed from CMIE Prowess Database
Aggregate(market) mispricing	MDev	Difference between fundamental value based on time-t fundamentals and fundamental value based on long-term multiples. [v(θit;αt) -v(θit;α)]	Computed from CMIE Prowess Database
Growth component	G	Difference between fundamental value based on long-term multiples and book value [v(θit;α) - lnBit]	Computed from CMIE Prowess Database
Investor Horizon	TO	Investor horizon is measured by the turnover ratio, which is the ratio of shares traded to shares outstanding during the fiscal year. High turnover ratio implies short-term investment horizon and vice versa.	CMIE Prowess Database
Financial constraint	KZ	Measures the degree to which the firm is financially constrained. A high value of KZ suggests the firm is financially constrained and more dependence on equity. KZ value is calculated from Baker et al. (2003) modified KZ equation	Computed from CMIE Prowess Database
Cash flow	CF	The ratio of profit after tax to total assets	CMIE Prowess Database
Sales growth	SG	Change in sales	Computed from CMIE Prowess Database

Variables	Symbol	Definition	Source
Investment	I	The ratio of net addition of fixed capital to total assets	Computed from CMIE Prowess Database
Market to Book Ratio	MB	The ratio of total assets minus book equity plus market capitalization all divided by total assets.	Computed from CMIE Prowess Database
Mispricing at the firm level	FDev	Difference between Observed market price at time t and fundamental value at time t [lnMit -v(θit;αt)]	Computed from CMIE Prowess Database
Aggregate(market) mispricing	MDev	Difference between fundamental valuebased on time-t fundamentals and fundamental value based on long-term multiples. [v(θit;αt) -v(θit;α)]	Computed from CMIE Prowess Database
Growth component	G	Difference between fundamental value based on long-term multiples and book value [v(θit;α) - lnBit]	Computed from CMIE Prowess Database
Investor Horizon	TO	Investor horizon is measured by the turnover ratio, which is the ratio of shares traded to shares outstanding during the fiscal year. High turnover ratio implies short-term investment horizon and vice versa.	CMIE Prowess Database
Financial constraint	KZ	Measures the degree to whichthe firm is financially constrained.A high value of KZ suggests the firm is financially constrained and more dependence on equity.KZ value is calculated from Baker et al. (2003) modified KZ equation	Computed from CMIE Prowess Database
Cash flow	CF	The ratio of profit after tax to total assets	CMIE Prowess Database
Sales growth	SG	Change in sales	Computed from CMIE Prowess Database