Table 2 Proxy for variables
From: Financial constraints and investment decisions of listed Indian manufacturing firms
Variable | Proxy used |
|---|---|
Investment | Gross fixed assets additions – Gross fixed assets deductions for the year (In millions). |
Change in sales | Sales n – Sales n-1 (In millions). |
Cash flow | Profit after tax +Depreciation +Amortisation for the year. |
Leverage | Total borrowings + preference share capital |
Replacement value of Capital stock | Gross fixed assets subject to the specification used by (Fazzari et al., 1988; Atheny and Laums, 1994; Bhaduri, 2005) |
GDP implicit price deflator | RBI data on GDP implicit price deflator for manufacturing firms subject to base year 2004–2005. |
Average service life of the firm | 16 years (Bhaduri, 2005) |
Size | Market capitalization |
Debt capacity | Tangible net worth (Net worth – Intangible net worth) |