Table A1 List of variables Variable...

Table A1

List of variables

Variable	Definition	Relevant literature
Dependent variables
TDB	Total Debt^* scaled by book value of total asset (BVTA)	Saif-Alyousfi et al. (2020), Antoniou et al. (2008), Korajczyk and Levy (2003)
LTDB	Long-term debt scaled by BVTA	Saif-Alyousfi et al. (2020), Titman and Wessels (1988)
TDM	Total debt scaled by market value of total asset (MVTA)^**	Deesomsak et al. (2004), Korajczyk and Levy (2003), Frank and Goyal (2009), Antoniou et al. (2008)
LTDM	Long-term debt scaled by MVTA	Korajczyk and Levy (2003), Titman and Wessels (1988)
Independent variables
PROFIT	EBITDA divided by BVTA	Vo et al. (2022), D’Amato (2019), Dakua (2018), Bevan and Danbolt (2004), Rajan and Zingales (1995)
lnASSET	Natural logarithm of Sales representing firm size	D’Amato (2019), Saif-Alyousfi et al. (2020), Dakua (2018), Rajan and Zingales (1995), Titman and Wessels (1988), Antoniou et al. (2008)
M/B	MVTA/BVTA	Vo et al. (2022), Li and Islam (2019), Deesomsak et al. (2004), Rajan and Zingales (1995)
TANG	Property, plant, and equipment scaled by BVTA	Following Shyam-Sunders and Myers (1999), PPE is used as proxy for fixed asset. Also used by Vo et al. (2022), Saif-Alyousfi et al. (2020), D’Amato (2019), Li and Islam (2019)
NDTS	Depreciation^*** scaled by BVTA	Vo et al. (2022), D’Amato (2019), Dakua (2018), Antoniou et al. (2008), Deesomsak et al. (2004), Chen (2004)
lnAGE	Natural logarithm of firm age	D’Amato (2019), Saif-Alyousfi et al. (2020), Bhaird and Lucey (2010)
RND	Research and development expense scaled by sales revenue	Titman and Wessels (1988) Frank and Goyal (2009)
CPX	Capital expenditure scaled by BVTA	Titman and Wessels (1988), Frank and Goyal (2009)

Variable	Definition	Relevant literature
Dependent variables
TDB	Total Debt^* scaled by book value of total asset (BVTA)	Saif-Alyousfi et al. (2020), Antoniou et al. (2008), Korajczyk and Levy (2003)
LTDB	Long-term debt scaled by BVTA	Saif-Alyousfi et al. (2020), Titman and Wessels (1988)
TDM	Total debt scaled by market value of total asset (MVTA)^**	Deesomsak et al. (2004), Korajczyk and Levy (2003), Frank and Goyal (2009), Antoniou et al. (2008)
LTDM	Long-term debt scaled by MVTA	Korajczyk and Levy (2003), Titman and Wessels (1988)
Independent variables
PROFIT	EBITDA divided by BVTA	Vo et al. (2022), D’Amato (2019), Dakua (2018), Bevan and Danbolt (2004), Rajan and Zingales (1995)
lnASSET	Natural logarithm of Sales representing firm size	D’Amato (2019), Saif-Alyousfi et al. (2020), Dakua (2018), Rajan and Zingales (1995), Titman and Wessels (1988), Antoniou et al. (2008)
M/B	MVTA/BVTA	Vo et al. (2022), Li and Islam (2019), Deesomsak et al. (2004), Rajan and Zingales (1995)
TANG	Property, plant, and equipment scaled by BVTA	Following Shyam-Sunders and Myers (1999), PPE is used as proxy for fixed asset. Also used by Vo et al. (2022), Saif-Alyousfi et al. (2020), D’Amato (2019), Li and Islam (2019)
NDTS	Depreciation^*** scaled by BVTA	Vo et al. (2022), D’Amato (2019), Dakua (2018), Antoniou et al. (2008), Deesomsak et al. (2004), Chen (2004)
lnAGE	Natural logarithm of firm age	D’Amato (2019), Saif-Alyousfi et al. (2020), Bhaird and Lucey (2010)
RND	Research and development expense scaled by sales revenue	Titman and Wessels (1988)Frank and Goyal (2009)
CPX	Capital expenditure scaled by BVTA	Titman and Wessels (1988), Frank and Goyal (2009)

Note(s): ^* Due to data limitations, book value instead of market value of debt has been used

^** Following Bevan and Danbolt (2002), Market Value of Total Asset has been calculated as follows

MVTA = BVTA -BVE + MVE

^*** Depreciation = EBITDA – Operating Income

Source(s): Authors’ own work

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