This study uses a sample of S&P firms in the ExecuComp database over the 13-year period from 1993 to 2005. We exclude financial firms with SIC codes from 6000 to 6999 because the nature of their liabilities and capital structures intrinsically differ from those of non-financial
firms. The overall sample consists of a total of 308 firms and a total of 2,647 observations of annual financial data. Notably, the financial data of some of the firms was not available for the entire period as they do not exist for all 13 years (i.e., 1993 to 2005). Consequently, the available firm observations over the 13-year