Definitions of the variables
| Type of variable | Variable name | Variable symbol | Definitions |
|---|---|---|---|
| Dependent variable | Management tone manipulation | Abtone | The net value of the residual term of the model (3.2.2) |
| Independent variable | D&O insurance | D&O | The listed company buys D&O insurance in the current year, and the value is 1, otherwise is 0 |
| Intermediary variable | Operating risk | D_Roa | 3-year volatility on the industry-adjusted return on assets |
| Agency cost | Fee | Management expenses/Main business income | |
| Control variables | Company size | Size | The natural logarithm of the total assets at the year end |
| Asset-liability ratio | Lev | Total debt at year end/Total asset at year end | |
| Growth rate of main business income | Growth | Increase of main business income in this period/Main business income of last year | |
| Return on equity | ROE | Net margin/Average net asset balance | |
| The proportion of independent directors | Dir | Number of independent directors/Total number of board members | |
| Equity concentration | Top1 | The largest shareholders shareholding ratio | |
| Loss or not | Loss | If the net profit of the year is less than 0, the value is 1, otherwise it is 0 | |
| Operating cash flow | OCF | Net cash flow from operating activities/total assets | |
| Liquidity ratio | LR | Current assets/current liabilities | |
| Book-to-market ratio | BM | Book value of total assets/Total market value | |
| Number of the board of directors | Board | The natural logarithm of the number of the board of directors | |
| Duality | Dual | Whether the chairman is concurrently CEO: concurrently = 1, not concurrently = 0 | |
| Industry | Industry | Industry virtual variables | |
| Year | Year | Year virtual variables |
| Type of variable | Variable name | Variable symbol | Definitions |
|---|---|---|---|
| Dependent variable | Management tone manipulation | The net value of the residual term of the model ( | |
| Independent variable | D&O insurance | The listed company buys D&O insurance in the current year, and the value is 1, otherwise is 0 | |
| Intermediary variable | Operating risk | 3-year volatility on the industry-adjusted return on assets | |
| Agency cost | Management expenses/Main business income | ||
| Control variables | Company size | The natural logarithm of the total assets at the year end | |
| Asset-liability ratio | Total debt at year end/Total asset at year end | ||
| Growth rate of main business income | Increase of main business income in this period/Main business income of last year | ||
| Return on equity | Net margin/Average net asset balance | ||
| The proportion of independent directors | Number of independent directors/Total number of board members | ||
| Equity concentration | The largest shareholders shareholding ratio | ||
| Loss or not | If the net profit of the year is less than 0, the value is 1, otherwise it is 0 | ||
| Operating cash flow | Net cash flow from operating activities/total assets | ||
| Liquidity ratio | Current assets/current liabilities | ||
| Book-to-market ratio | Book value of total assets/Total market value | ||
| Number of the board of directors | The natural logarithm of the number of the board of directors | ||
| Duality | Whether the chairman is concurrently CEO: concurrently = 1, not concurrently = 0 | ||
| Industry | Industry virtual variables | ||
| Year | Year virtual variables |
Source(s): Table by authors
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