Table A1 Variable definitions Variable...

Table A1

Variable definitions

Variable	Definition and measurement
Dependent variables (firm value and board monitoring intensity)
Firm value variables (FV)
TOBINQ	Tobin’s Q, the firm’s market value to its replacement costs, is approximated by the market capitalisation plus the difference between the book value of total assets and the book value of equity divided by the book value of total assets
MKTBK	The Market-to-Book ratio is the natural logarithm of the share price divided by the net book value per share
NAVPS	Net Asset Value Per Share, total assets minus liabilities divided by the number of outstanding shares
MKTVAL	Market Value is the natural logarithm of the total number of shares multiplied by the closing market price (per share)
Board monitoring intensity variables (BMI)
BMEET	Board meetings frequency, the sum number of board meetings, and the number of conferences held by the board during the year
LNBMEET	Board meetings, the natural logarithm of the sum of the number of board meetings and the number of conferences held by the board during the year
Independent variables (Chair-CEO age dissimilarity)
GAPS	Age dissimilarity Signed, age difference (in years) between the Chair and the CEO calculated as chair age minus CEO age
GAPU	Age dissimilarity Unsigned is the absolute value of the age difference (in years) between the Chair and the CEO
GAPSQU	Age dissimilarity Squared, the squared age difference between the CEO and the board chair
GAP20/15/10/5	GAP20, GAP15, GAP10 and GAP5: Chair-CEO, dummy variable that takes a value of 1 if the age difference between the A dummy variable where Chair and the CEO age gap is at least 20 (15/10/5) years, and 0 otherwise. This dummy variable measures a generational gap, as reflected by an age difference of at least 20/15/10/5 years following Strauss and Howe (1997) and Zhu et al. (2021)
Chair-CEO characteristics
DIFEDU	Chair-CEO has a different education; a dummy variable is set to 1 if the Chair and the CEO do not have the same education degree level (bachelor, master, PhD, and others), and 0 otherwise
DIFGEN	Chair-CEO different gender, dummy variable set to 1 if the Chair and the CEO have a different gender, and 0 otherwise
DIFNAT	Chair-CEO has different nationalities, and the dummy variable is set to 1 if the Chair and the CEO have different nationalities and 0 otherwise
JONTENU	Chair-CEO joint tenure is the number of years the Chair and the CEO have worked together in these positions
TENURE1	Chair tenure is the number of years the Chair has been serving as the firm’s CEO
CHANGE1	Chair change, dummy variable set to 1 for years when there is a Chair change, and 0 otherwise
TENURE2	CEO tenure is the number of years the CEO has been serving as the firm’s CEO
CHANGE2	CEO change, dummy variable set to 1 for years when there is a CEO change, and 0 otherwise
Board characteristics
BODAGE	Board age, the average age of all the directors’ representatives on the board
BODSIZE	Board size, the total number of members on the board
CVBA	CV board age, the coefficient of variation of the board members’ age defined as the standard deviation of the age of shareholder representatives on the board divided by the average age of shareholder representatives
Firm-level control variable
LEVER	Leverage is measured as the firm’s total liabilities over total assets
CapEx/TA	CapEx/TA, the firm’s capital expenditures (CapEx) are standardized by total assets, both measured at the end of the fiscal year (t−1)
FFIRM	Family firm, dummy variable that is set to 1 if the firm is a family firm and 0 otherwise
FIRMAGE	Firm age is the number of years since the firm was listed
R&D	R&D expenditures, the natural logarithm of the firm’s annual R&D expenditures, are divided by total revenue (plus 1 if the firm’s annual R&D expenditures are divided by total revenue is less than 1)
SALEGR	Sales growth is measured by the changes in sales between year (t) and year (t−1)
FSIZE	Firm Size is the natural logarithm of the firm’s total assets
BETA	Beta coefficient of firm’s stock. The covariance of the corporate security’s return with the market return is divided by the variance of the market return. Use the comprehensive market return of the Shanghai and Shenzhen markets as the market return (for all stocks)
STOCKVOL	Stock volatility is measured by the stock volatility (standard deviation) over the past two years using daily stock returns
Control variable about characteristics (management board)
CVMBA	Coefficient of variation management board committee age, the coefficient of variation of the management board committee age defined as the standard deviation of the age of the members of the board committee, excluding the CEO, divided by the average age of the members of the board committee, excluding the CEO
MBSIZE	Board committee size, the natural logarithm of the total number of members of the board committee
MBTENU	Board committee tenure, the average number of years the members of the board committee have been serving on the firm’s board committee, excluding the CEO
SBSIZE	Supervisory board size, the natural logarithm of the annual number of supervisors
Other variables
BMEET_median	Board Meetings Above Median, a dummy variable of value 1 is assigned if the value of BMEET is higher than the median and 0 otherwise
LNBMEET_median	Ln (Board Meetings) Above Median, a dummy variable of value 1 is assigned if the value of LNBMEET is higher than the median and 0 otherwise
GAPS_median	Age dissimilarity Signed Above Median, a dummy variable of value 1 assigned if the value of GAPS is higher than the median and 0 otherwise
GAPU_median	Age dissimilarity Unsigned Above Median, a dummy variable of value 1 assigned if the value of GAPU is higher than the median and 0 otherwise
BLOCKHD 50%	Blockholder 50%, dummy variable that takes the value of 1 if a single shareholder holds at least 50% of the common shares outstanding, and 0 otherwise
SOE	SOE, dummy variable set to 1 if state-owned or state-holding firms and 0 otherwise
FCF	FCF/TA, free cash flow (defined as EBITDA–Cap/Ex) divided by total assets
HHI	The Herfindahl-Hirschman index, calculated by squaring the market share of each competing firm in the same industry and then summing the resulting numbers, weighted by market share in the same industry and in one year, the result is proportional to the average market share (range from 0 to 1). Increases in the HHI generally indicate a decrease in competition and an increase in market power, and vice versa
CEO age	CEO age, the age of the firm’s chief executive officer (CEO)
Chair age	Chair age, the age of the board’s chair (Chair)
GAPD	Age Gap Dummy, variable set to 1 if the GAPU is not 0, and 0 otherwise
CRG	Cultural Revolution Generation, dummy variable set to 1 if the Chair or the CEO is at least 16 years old during the Cultural Revolution (1966–1976), and 0 otherwise
ChairNCN	Chair Nationality, dummy variable set to 1 if Chair’s nationality is Chinese, and 0 otherwise
CEONCN	CEO Nationality, dummy variable set to 1 if the CEO’s nationality is Chinese, and 0 otherwise

Variable	Definition and measurement
Dependent variables (firm value and board monitoring intensity)
Firm value variables (FV)
TOBINQ	Tobin’s Q, the firm’s market value to its replacement costs, is approximated by the market capitalisation plus the difference between the book value of total assets and the book value of equity divided by the book value of total assets
MKTBK	The Market-to-Book ratio is the natural logarithm of the share price divided by the net book value per share
NAVPS	Net Asset Value Per Share, total assets minus liabilities divided by the number of outstanding shares
MKTVAL	Market Value is the natural logarithm of the total number of shares multiplied by the closing market price (per share)
Board monitoring intensity variables (BMI)
BMEET	Board meetings frequency, the sum number of board meetings, and the number of conferences held by the board during the year
LNBMEET	Board meetings, the natural logarithm of the sum of the number of board meetings and the number of conferences held by the board during the year
Independent variables (Chair-CEO age dissimilarity)
GAPS	Age dissimilarity Signed, age difference (in years) between the Chair and the CEO calculated as chair age minus CEO age
GAPU	Age dissimilarity Unsigned is the absolute value of the age difference (in years) between the Chair and the CEO
GAPSQU	Age dissimilarity Squared, the squared age difference between the CEO and the board chair
GAP20/15/10/5	GAP20, GAP15, GAP10 and GAP5: Chair-CEO, dummy variable that takes a value of 1 if the age difference between the A dummy variable where Chair and the CEO age gap is at least 20 (15/10/5) years, and 0 otherwise. This dummy variable measures a generational gap, as reflected by an age difference of at least 20/15/10/5 years following Strauss and Howe (1997) and Zhu et al. (2021)
Chair-CEO characteristics
DIFEDU	Chair-CEO has a different education; a dummy variable is set to 1 if the Chair and the CEO do not have the same education degree level (bachelor, master, PhD, and others), and 0 otherwise
DIFGEN	Chair-CEO different gender, dummy variable set to 1 if the Chair and the CEO have a different gender, and 0 otherwise
DIFNAT	Chair-CEO has different nationalities, and the dummy variable is set to 1 if the Chair and the CEO have different nationalities and 0 otherwise
JONTENU	Chair-CEO joint tenure is the number of years the Chair and the CEO have worked together in these positions
TENURE1	Chair tenure is the number of years the Chair has been serving as the firm’s CEO
CHANGE1	Chair change, dummy variable set to 1 for years when there is a Chair change, and 0 otherwise
TENURE2	CEO tenure is the number of years the CEO has been serving as the firm’s CEO
CHANGE2	CEO change, dummy variable set to 1 for years when there is a CEO change, and 0 otherwise
Board characteristics
BODAGE	Board age, the average age of all the directors’ representatives on the board
BODSIZE	Board size, the total number of members on the board
CVBA	CV board age, the coefficient of variation of the board members’ age defined as the standard deviation of the age of shareholder representatives on the board divided by the average age of shareholder representatives
Firm-level control variable
LEVER	Leverage is measured as the firm’s total liabilities over total assets
CapEx/TA	CapEx/TA, the firm’s capital expenditures (CapEx) are standardized by total assets, both measured at the end of the fiscal year (t−1)
FFIRM	Family firm, dummy variable that is set to 1 if the firm is a family firm and 0 otherwise
FIRMAGE	Firm age is the number of years since the firm was listed
R&D	R&D expenditures, the natural logarithm of the firm’s annual R&D expenditures, are divided by total revenue (plus 1 if the firm’s annual R&D expenditures are divided by total revenue is less than 1)
SALEGR	Sales growth is measured by the changes in sales between year (t) and year (t−1)
FSIZE	Firm Size is the natural logarithm of the firm’s total assets
BETA	Beta coefficient of firm’s stock. The covariance of the corporate security’s return with the market return is divided by the variance of the market return. Use the comprehensive market return of the Shanghai and Shenzhen markets as the market return (for all stocks)
STOCKVOL	Stock volatility is measured by the stock volatility (standard deviation) over the past two years using daily stock returns
Control variable about characteristics (management board)
CVMBA	Coefficient of variation management board committee age, the coefficient of variation of the management board committee age defined as the standard deviation of the age of the members of the board committee, excluding the CEO, divided by the average age of the members of the board committee, excluding the CEO
MBSIZE	Board committee size, the natural logarithm of the total number of members of the board committee
MBTENU	Board committee tenure, the average number of years the members of the board committee have been serving on the firm’s board committee, excluding the CEO
SBSIZE	Supervisory board size, the natural logarithm of the annual number of supervisors
Other variables
BMEET_median	Board Meetings Above Median, a dummy variable of value 1 is assigned if the value of BMEET is higher than the median and 0 otherwise
LNBMEET_median	Ln (Board Meetings) Above Median, a dummy variable of value 1 is assigned if the value of LNBMEET is higher than the median and 0 otherwise
GAPS_median	Age dissimilarity Signed Above Median, a dummy variable of value 1 assigned if the value of GAPS is higher than the median and 0 otherwise
GAPU_median	Age dissimilarity Unsigned Above Median, a dummy variable of value 1 assigned if the value of GAPU is higher than the median and 0 otherwise
BLOCKHD 50%	Blockholder 50%, dummy variable that takes the value of 1 if a single shareholder holds at least 50% of the common shares outstanding, and 0 otherwise
SOE	SOE, dummy variable set to 1 if state-owned or state-holding firms and 0 otherwise
FCF	FCF/TA, free cash flow (defined as EBITDA–Cap/Ex) divided by total assets
HHI	The Herfindahl-Hirschman index, calculated by squaring the market share of each competing firm in the same industry and then summing the resulting numbers, weighted by market share in the same industry and in one year, the result is proportional to the average market share (range from 0 to 1). Increases in the HHI generally indicate a decrease in competition and an increase in market power, and vice versa
CEO age	CEO age, the age of the firm’s chief executive officer (CEO)
Chair age	Chair age, the age of the board’s chair (Chair)
GAPD	Age Gap Dummy, variable set to 1 if the GAPU is not 0, and 0 otherwise
CRG	Cultural Revolution Generation, dummy variable set to 1 if the Chair or the CEO is at least 16 years old during the Cultural Revolution (1966–1976), and 0 otherwise
ChairNCN	Chair Nationality, dummy variable set to 1 if Chair’s nationality is Chinese, and 0 otherwise
CEONCN	CEO Nationality, dummy variable set to 1 if the CEO’s nationality is Chinese, and 0 otherwise

Source(s): Created by authors

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