Table 3.

Variable definitions

Variable	Definition
Capital ratio	The ratio of own funds over total assets of the firm.
Cash ratio	The ratio of cash holdings over total assets of the firm.
Cash flow ratio	The ratio of cash flow over total assets of the firm.
Age	The number of years since funding.
Ln(total assets)	The log of the total assets of the firm.
ΔSit	The annual percentage increase in sales: Sit/Sit− 1-1.
Iit /Ait− 1 (tangible)	The annual increase in gross tangible fixed assets (i.e. property, plants and equipment) scaled by
	beginning-of-year total assets.
Iit /Ait− 1 (all fixed assets)	The annual increase in both gross tangible (i.e. property, plants and equipment) and intangible (i.e.
	patents, copyrights, trademarks and franchises) fixed assets scaled by beginning-of-year total assets.
Investment rate	The ratio of all fixed assets investment over the value added of the firm.
Trade credit ratio	The ratio of accounts payable over total assets of the firm.
Working capital needs	The sum of accounts receivable and inventories minus accounts payable and other non-financial
	debt due in less than one year.
Working capital ratio	The ratio of working capital needs over total assets of the firm.
Gross working capital ratio	The sum of accounts receivable and inventories over total assets of the firm.
ΔW /Ait− 1	The annual increase in working capital needs scaled by beginning-of-year total assets.
ICCC	The Index of Cash Credit Constraint. The ICCC defines firms that can be considered as cash
	credit constrained using information derived from their financial situation and their access to
	finance. See Section 5 for more details.
IICC	The Index of Investment Credit Constraint. The ICCC defines firms that can be considered as
	investment credit constrained using information derived from their financial situation and their
	access to finance. See Section 5 for more details.
Uncertainty	The dispersion of firms’ ROA (net income over total assets of the firm) within a given
	year and sector.