Variable definitions (data sources are SKRIN and Datastream)
| Notation | Variable | Definition |
|---|---|---|
| TOBIN | Tobin's Q | The sum of the market value of equity (share price multiplied by the number of ordinary shares issued at the end of a fiscal year) and the book value of debt divided by the book value of total assets |
| CAP | Market capitalization | The item represents the total market value of the company based on the year end price and number of shares outstanding |
| CSR | CSR disclosure index | CSR disclosure comprising 22 items based on information extracted from annual reports |
| AEM | Proxy for accrual-based earnings management | A measure of discretionary accruals based on the modified Jones model (Dechow, 1994; Jones, 1991) |
| REM | Proxy for real-based earnings management | A combined measure of real earnings management calculated by aggregating three individual real activities manipulation proxies: abnormal cash flow from operations (ABs_CFO), abnormal production cost (AB_PROD), and abnormal discretionary expenditure (AB_EXP). The approach is based on Roychowdhury (2006) and Kim et al. (2012) |
| EM_proxy | Proxy for accrual-based earnings management | An alternative proxy for earnings management reflecting how insiders use their discretion to smooth reported earnings to manipulate the volatility of operating earnings with respect to the original cash flow. The approach is based on Laux and Leuz (2009) and Leuz et al. (2003) |
| SOE_share | State ownership | The share of state ownership in total equity |
| STATE | State ownership | A dummy variable equal to 1 if a company has state ownership, and 0 otherwise |
| SIZE | Firm size | Natural log of total assets |
| ROA | Return on assets | Net income divided by total assets at the beginning of the year |
| LEV | Leverage | Total debt divided by total assets |
| BOARD | Board size | Natural logarithm of the amount of board members |
| WOMEN | Women on board | Share of women on board of directors |
| INDEP | Independent board members | Share of independent board members |
| Notation | Variable | Definition |
|---|---|---|
| Tobin's Q | The sum of the market value of equity (share price multiplied by the number of ordinary shares issued at the end of a fiscal year) and the book value of debt divided by the book value of total assets | |
| Market capitalization | The item represents the total market value of the company based on the year end price and number of shares outstanding | |
| CSR disclosure index | CSR disclosure comprising 22 items based on information extracted from annual reports | |
| Proxy for accrual-based earnings management | A measure of discretionary accruals based on the modified Jones model ( | |
| Proxy for real-based earnings management | A combined measure of real earnings management calculated by aggregating three individual real activities manipulation proxies: abnormal cash flow from operations (ABs_CFO), abnormal production cost (AB_PROD), and abnormal discretionary expenditure (AB_EXP). The approach is based on | |
| Proxy for accrual-based earnings management | An alternative proxy for earnings management reflecting how insiders use their discretion to smooth reported earnings to manipulate the volatility of operating earnings with respect to the original cash flow. The approach is based on | |
| State ownership | The share of state ownership in total equity | |
| State ownership | A dummy variable equal to 1 if a company has state ownership, and 0 otherwise | |
| Firm size | Natural log of total assets | |
| Return on assets | Net income divided by total assets at the beginning of the year | |
| Leverage | Total debt divided by total assets | |
| Board size | Natural logarithm of the amount of board members | |
| Women on board | Share of women on board of directors | |
| Independent board members | Share of independent board members |
Source(s): Author's own creation/work
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