Table 1 Definition of the main variables...

Table 1

Definition of the main variables in the study

Name	Symbol	Definition
R&D investment	R&D	R&D investment/total assets
Independent directors’ status	Status	1 - Annual report disclosure sequence of independent directors/total number of directors, supervisors and executives
Concurrently general manager and chairman of the board	Duality	A dummy variable that equals 1 if the general manager and the chairman of the board are the same person, and 0 otherwise
Leverage	Lev	Total debt/total assets
Return on assets	ROA	Profit/total assets
Growth ability	Growth	The ratio of the difference between the operating income at the year end and that at the beginning of the year to the operating income at the beginning of the year
Cash holding	Cash	Cash and cash equivalents/total assets
Firm size	Size	Log (total assets)
Percentage of shares held by the top shareholder	Firsthold	The shareholding ratio of the largest shareholder
Management shareholding ratio	Manhold	The shareholding ratio of the management
Company listing years	Listage	Log (Total number of company’s listing years)
Board size	Boardsize	Log (total number of board members)
Independent director ratio	IndR	The ratio of the total number of independent directors to the total number of board members
Book-to-market ratio	Bm	Book value/Market value
Nature of ownership	SOE	A dummy variable that equals 1 if the company is state-owned, and 0 otherwise
Instrumental variables	Status_prov	Mean Independent Director Position within the Same Year and Province
Inverse mills ratio	IMR	Inverse Mills Ratio Calculated from Model (3) Regression
Independent directors’ status 2	Status2	Mean Residual Obtained from Regression Using Model (4)
Promulgation of document no. 18	DID	Interaction Term of Group Identifier (Treat) and Event Period (Post). When the independent director position is elevated after the issuance of Document No. 18 in 2013, Treat takes the value of 1, otherwise 0; when the sample is before the year 2013, Post takes the value of 0, otherwise 1
R&D synchronicity 1	HerdRD1	Absolute Deviation of Company’s R&D Investment Level from the Average R&D Investment Level of Industry Leaders in the Previous Year
R&D synchronicity 2	HerdRD2	Absolute Deviation of Company’s R&D Investment Level from the Median R&D Investment Level within the Industry in the Previous Year
Earnings management 1	AbsDA1	Absolute Value of Discretionary Accruals Calculated using the Jones Model
Earnings management 2	AbsDA2	Absolute Value of Discretionary Accruals Calculated using the Lu Jianqiao Model
Proportion of board members with overseas background	Overseas1	Number of Board Members with Overseas Background/Total Board Members
Proportion of independent directors with overseas background	Overseas2	Number of Board Members with Overseas Background/Total Independent Directors
Chairman’s overseas background dummy variable	Overseas3	Chairman with Overseas Background takes the value of 1; otherwise, it takes the value of 0
Regional cultural atmosphere intensity dummy variable	Area	Company’s Registered Location in a High “Power Distance” Area takes the value of 1; otherwise, it takes the value of 0
Opacity of information 1	Lowtrans1	Standard Deviation of Operating Profit for the Past Three Years/Standard Deviation of Operating Cash Flow for the Past Three Years
Opacity of information 2	Lowtrans2	Mean Analyst Forecast Accuracy for the Company

Name	Symbol	Definition
R&D investment	R&D	R&D investment/total assets
Independent directors’ status	Status	1 - Annual report disclosure sequence of independent directors/total number of directors, supervisors and executives
Concurrently general manager and chairman of the board	Duality	A dummy variable that equals 1 if the general manager and the chairman of the board are the same person, and 0 otherwise
Leverage	Lev	Total debt/total assets
Return on assets	ROA	Profit/total assets
Growth ability	Growth	The ratio of the difference between the operating income at the year end and that at the beginning of the year to the operating income at the beginning of the year
Cash holding	Cash	Cash and cash equivalents/total assets
Firm size	Size	Log (total assets)
Percentage of shares held by the top shareholder	Firsthold	The shareholding ratio of the largest shareholder
Management shareholding ratio	Manhold	The shareholding ratio of the management
Company listing years	Listage	Log (Total number of company’s listing years)
Board size	Boardsize	Log (total number of board members)
Independent director ratio	IndR	The ratio of the total number of independent directors to the total number of board members
Book-to-market ratio	Bm	Book value/Market value
Nature of ownership	SOE	A dummy variable that equals 1 if the company is state-owned, and 0 otherwise
Instrumental variables	Status_prov	Mean Independent Director Position within the Same Year and Province
Inverse mills ratio	IMR	Inverse Mills Ratio Calculated from Model (3) Regression
Independent directors’ status 2	Status2	Mean Residual Obtained from Regression Using Model (4)
Promulgation of document no. 18	DID	Interaction Term of Group Identifier (Treat) and Event Period (Post). When the independent director position is elevated after the issuance of Document No. 18 in 2013, Treat takes the value of 1, otherwise 0; when the sample is before the year 2013, Post takes the value of 0, otherwise 1
R&D synchronicity 1	HerdRD1	Absolute Deviation of Company’s R&D Investment Level from the Average R&D Investment Level of Industry Leaders in the Previous Year
R&D synchronicity 2	HerdRD2	Absolute Deviation of Company’s R&D Investment Level from the Median R&D Investment Level within the Industry in the Previous Year
Earnings management 1	AbsDA1	Absolute Value of Discretionary Accruals Calculated using the Jones Model
Earnings management 2	AbsDA2	Absolute Value of Discretionary Accruals Calculated using the Lu Jianqiao Model
Proportion of board members with overseas background	Overseas1	Number of Board Members with Overseas Background/Total Board Members
Proportion of independent directors with overseas background	Overseas2	Number of Board Members with Overseas Background/Total Independent Directors
Chairman’s overseas background dummy variable	Overseas3	Chairman with Overseas Background takes the value of 1; otherwise, it takes the value of 0
Regional cultural atmosphere intensity dummy variable	Area	Company’s Registered Location in a High “Power Distance” Area takes the value of 1; otherwise, it takes the value of 0
Opacity of information 1	Lowtrans1	Standard Deviation of Operating Profit for the Past Three Years/Standard Deviation of Operating Cash Flow for the Past Three Years
Opacity of information 2	Lowtrans2	Mean Analyst Forecast Accuracy for the Company

Source(s): Table by authors

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