To include a firm-year observation in our analysis, the GIndex data must be available in the IRRC data set.
Information on the book and market value of equity, total assets, sales, long-term debt, common shares
outstanding, net working capital, research and development expenditures, capital expenditures, acquisitions,
dividends, and repurchases must be available in the Compustat database. Additional information on
institutional ownership, insider ownership, and executive compensation must also be available from the
Execucomp and Thomson Financial databases. Finally, we delete all firms that are subject to regulation and
firms with SIC codes between 6000 and 6999 because of their involvement in inventories of marketable
securities. Merging the databases and applying these requirements yields a data set of 11,645 firm-year
observations on 1872 firms for the years 1993 through 2004