Table 12 Variable descriptions
Variable | Description |
|---|---|
ROA | Net income divided by total assets. |
OROA | Operating income divided by total assets. |
ROS | Net income divided by total sales. |
OROS | Operating income divided by total sales. |
NFChair | The indicator of the relationship between the controller and the board chair, which equals 1 if the chair is not a family member (and 0 otherwise). |
Size | The natural logarithm of a firm’s market capitalization. |
MB | The ratio of the market-to-book value of equity. |
Leverage | Total liabilities divided by total assets. |
Board | The natural logarithm of the number of directors on the board. |
Independence | The percentage of independent directors on the board. |
Duality | A dummy variable, which equals 1 if the chair is also the CEO (and 0 otherwise). |
Top1 | The percentage of shares held by the largest shareholder. |
Top25 | The sum of percentages of shares held by the second to fifth largest shareholders. |
Institution | The percentage of shares held by institutional investors. |
Foreign | A dummy variable, which equals 1 if there are foreign investors (and 0 otherwise). |
Tangibility | The ratio of fixed assets to total assets. |
Firm age | The number of years since a firm’s founding. |
CapEx | The ratio of the difference between the cash paid and received from the treatment of fixed, intangible and other long-term assets to total assets. |
Meal income | The logarithm of total meal income of catering firms at the province level. |
Divorce rate | The number of divorce registrations per 10,000 people in the province where a family firm is located. |
Institutional development | An index measuring the development of market intermediaries and the legal environment. |
Analyst coverage | The number of analysts following a listed firm. |
Hurun times | The number of times the controller is included on the Hurun China Rich List. |
Ownership balance | The ratio of the Top1 to the Top25. |
One-child policy | A dummy variable, which equals 1 if the controller is born in a year later than 1960 (and 0 otherwise). |
NFCEO | A dummy variable, which is equal to 1 if the CEO is a non-family member and (0 otherwise). |
Chair_Age | The logarithm of a chair’s age. |
Chair_Education | The education level received by the board chair which ranges from 1 (lower than senior high school) to 5 (Ph.D. degree and above). |
Chair_Gender | A dummy variable, which equals 1 if the board chair is female (and 0 otherwise). |
Numfirm | The number of firms that the controller controls in a given year. |
Agecon | The logarithm of the controller’s age. |
Excon | The difference between the ownership rights and the control rights held by the controlling family. |
Finish | A dummy variable, which equals 1 if the firm has completed the split share structure reform. |