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Variable Measurement for main econometric model , 0 1 , 2 , 3 , 4, 0 , 5 , 6 , 7 , ,, 8 90 i t i t i t i t i t i t i t i i t i t t i t Performance Dividend Leverage AssetGrowth ProfitVolatility Liquidity Tangibility Overinvestment SOErate Overinves Performance Performanc m ne t e t                         , , 50% 10 , , ,, ,0 .i t i t i t i t i t ti t i SOErate Overinvestment SOEratePerformance SOE        Dependent Variables Variables Denote Definition Firm Performance EBIT/TA EBIT (Earnings Before Interest & Tax) divided by Total Asset EBT/TA EBT (Earnings Before Tax) divided by Total Asset EAT/TA EAT (Earnings After Tax) divided by Total Asset Explanatory Variables Variables Denote Definition Profit volatility ,i tMROA Moving average of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) over Total Asset ratios in three consecutive years Company Growth ,i t AssetGrowth Growth rates of total assets Dividend ,i tDividend Cash dividend payments Leverage ,i tLeverage Total liabilities over total assets Liquidity ,i tLiquidity The ratio of short-term assets to short-term debt Tangibility ,i tTangibility The sum of fixed assets, real estates, and inventory divided by total assets Overinvestment ,i tOverinvestment The error terms of Equation (1) with ,ˆ 0i t  State ownership rate ,i tSOErate State ownership rates SOE dummy 50% ,i tSOE  Dummy variable equal 1 if SOE rates < 50% 252 Table A2. Variable Measurement for sub equation , 0 1 , 2 , 3 , 4 , 5 , 6 , 7, 0 , , i t i t i t i t i t i t i t it ti t i NewInvestment CashFlow TobinQ FixCapitalIntensity FirmSize RevenueGrowth BusinessRisk LeverageNewInvestment                    Dependent Variables Variables Denote Definition New Investment ,i tNewInvestment Total investment including long-term and short-term investment divided by total asset Explanatory Variables Variables Denote Definition Cash Flow ,i tCashFlow The cash available in a company after subtracting capital expenditures Market Performance ,i tTobinQ The Q ratio is calculated as the market value of a company divided by the firm's assets Fix Capital Intensity ,i t FixCapitalIntensity The ability to generate fixed assets through sales measured by total fix asset divided by total sales Firm Growth ,i tRevenueGrowth The growth rate of firm's revenue over year Firm Size ,i tFirmSize Natural logarithm of total asset Business Risk ,i tBusinessRisk Standard deviation of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) over Total Asset ratio in three consecutive years Leverage ,i tLeverage Total liabilities over total asset All the above variables are calculated by using financial data from Thomson Reuters Eikon Financial Analysis