Table 1 Definition of variables and measurement
Variables | Abbreviation | Proxy for calculation |
|---|---|---|
Financial distress | FD | Binary variable; financially distressed = 1; non-financially distressed = 0 |
Working capital to total assets ratio | WCTA | Working capital/total assets |
Retained earnings to total assets ratio | RETA | Retained earnings/total assets |
Earnings before interest & taxes to total assets ratio | EBITTA | Earnings before interest and taxes/total assets |
Market value of equity to total liabilities ratio | MVETL | Market value of equity/total liabilities |
Sales to total assets ratio | SalesTA | Sales/total assets |
Market capitalization | lnMcap | Natural logarithm of market capitalization |
Interest rate | IR | Prevailing annual interest rate |
GDP growth rate | GDP | Annual growth rate in gross domestic product at current prices |
Consumer price index | CPI | Annual change in consumer price index |
Corporate governance index score | CGI | Sum of scores from answers to a questionnaire to total score (three questions on disclosure and transparency, five questions on characteristics of the board of directors, two questions on shareholders’ rights and investor relations, and four questions on ownership and control structure); Yes = 1, No = 0 |
COVID-19 | COVID-19 | A dummy variable for COVID-19; Pre-COVID years (2016 -2019); Post-COVID years (2020–2021) |