·
is financial performance at time t for firm i measured by
either the market-to-book ratio or return on assets.
·
is managerial ownership in percentage at time t in firm i
for the piecewise linear interval d. The applied intervals are: [0;0.5%],
[0.5;1%], [1;5%], [5;30%], and [30;100%]. OW_{i,t} is non-piecewise
managerial ownership so that .
·
is financial performance at time t+1 as expected at time
t in firm i.
·
is the natural logarithm of the salary of the top 2
highest paid managers measured in $ at time t in firm i for the piecewise
linear interval c. |
·
Other variable abbreviations:** MarkCap** is market capitalization.
**BETA** is stock market beta risk. **CapExp** is capital expenditures.
**PPECap** is total property, plant and equipment. **OpeInc** is
operating income. **Sales** is simply revenue on sales. **LTDebt** is
long-term debt. **Assets** is total assets. **R&D** is research and
development costs. **DR&D** is a dummy for missing R&D values. **Adver**
is marketing or advertising costs. **DAdver** is a dummy for missing
advertising values. **DSAL** is a dummy for missing salary values. **
DIndust1** and **DIndust2** are industry dummies. **DExchange** is a
stock exchange dummy. **DIncorp** is a dummy for country of incorporation.*
*
·
*a*_{x,y}
are model parameters to be estimated by regression techniques.
·
*e*_{1,i} , e_{2,i} ,
and* e*_{3,i} are* *the residual
errors for each equation and each firm i. |