CEO Turnover: Governance Mechanisms, Company Performance and Restructuring in the U.K. and Germany

I discuss accounting data obtained from COMPUSTAT Global to calculate items required for the analysis.
As a first step, I convert all numeric items but number of employees into U.S. Dollars, deflating them to the year 2000.
I calculate return on assets (ROA) as operating income before depreciation in year t (COMPUSTAT item oibdp) over total assets in year t-1. I define leverage as total liabilities on total assets while I identify dividend cuts and omissions as events whereby a firm which distributed a positive common dividend in year t-1 distributes a lower one or none at all in year t.
I adjust ROA, leverage, assets and employees in order to check for industry effects applying a dynamic industry adjustment procedure in the following way.
I calculate industry-adjusted return on assets (IAROA) in year t subtracting from ROA the median value of the corresponding measure for all corporations in the same country with the same two-digit SIC industry code in year t.
I decide to adopt a two-digit industry code to broaden industry definition, allowing a higher number of matched observations.