Table 1 Variable definitions and calculation methods.

From: Impact of transaction-oriented financial assets on firm innovation in China: effects of liquid reserve and risk mitigation

Variable

Definition

Calculation methods

INV

Investment expenditure

Fixed assets, intangible assets, and other long-term assets/total assets

RD

Innovation input

R&D expenditure/total assets

LnPAT

Innovation output

The logarithm of invention patents

SF

Transaction-oriented financial assets

Transactional financial assets + wealth management and trust products

SF1

Transactional financial assets

Financial assets for trading, derivative financial assets, net short-term investment, net financial assets available for sale, net held-to-maturity investment, and net long-term debt investment.

SF2

Wealth management and trust products

Manually sorting out the details of “other liquid assets” in the notes to firms’ financial statements

RISK

Risk-taking level

The standard deviation of the fluctuation of ROA after industry annual adjustment for three consecutive years

SIZE

Firm size

The natural logarithm of total assets of firms

DBR

Asset–liability ratio

Total liabilities/total assets

EBIT

Firm profitability level

Net profit/total assets

TOBIN’Q

Firm growth ability

Market value of total assets/ book value of total assets

AM

Net cash flow from operations

Net cash flow from business activities/total assets

AGE

Firm age

The natural logarithm of firms’ age

CONC

Ownership concentration level

The shareholding ratio of the top three shareholders

INDUSTRY

Dummy variable

The classification of Industry follows the Guidelines on Industry Classification of Listed firms issued by China Securities Regulatory Commission (CSRC) in 2012. The manufacturing industry takes the first two digits of industry codes and the remaining takes the next digit of industry codes. After excluding industries with less than 30 firms’ data, 18 industries remained.

YEAR

Dummy variable

There are 10 YRAR variables.