Table 1 Variable definitions.
Types | Name | Symbol | Definitions |
|---|---|---|---|
Dependent variable | Inefficient investment | INVEFF | As mentioned earlier, the absolute value of the regression residuals |
Overinvestment | OVER | As mentioned earlier, the absolute value of residuals >0 | |
Underinvestment | UNDER | As mentioned earlier, the absolute value of residuals <0 | |
Independent variable | Digital inclusive finance | DWF | Municipal-level Digital Financial Inclusion Index |
Control variables | Firm size | Size | Natural logarithm of total assets at the end of the year |
Financial leverage | Lev | Total liabilities divided by total assets at the end of the year | |
Firm performance | ROA | The ratio of net profits to the total assets | |
Ownership concentration | Top1 | Number of shares held by the largest shareholder divided by the total number of shares of the firm | |
Board size | Board | The natural log of the number of directors on the board | |
Number of firm four committees | Comnum | The number of audits, strategy, remuneration, and nomination committees established. | |
State ownership | State | Take the value of one when a firm’s ultimate controlling shareholder is government and 0 otherwise. | |
Listing age | Age | The natural log of [listing years + 1] | |
Cash ratio | Cash | The ratio of cash flow generated from the firm’s operating activities to total assets | |
Stock returns | Ret | Annual return on firm stock considering reinvestment of cash dividends | |
Percentage of fixed assets | PPE | Firm fixed assets divided by total assets |
