Table 1 Main empirical evidence from...

Table 1

Main empirical evidence from ordered probit and logit models

Variable	Expectation	Model 1		Model 2
		Probit	Logit	Probit	Logit
$N e g a t i v i t y_{i t}^{2}$	α2 < 0			−0.600***	−1.187***
$N e g a t i v i t y_{i t}$	α1 > 0	0.490***	0.912***	1.067***	2.033***
$E T R_{i t}$		−0.084**	−0.159**	−0.081**	−0.157**
$R O I C_{i t - 1}$		−0.405***	−0.688***	−0.430***	−0.749***
$A D A_{i t - 2}$		−0.233***	−0.462***	−0.179***	−0.324***
$Q R_{i t}$		0.292***	0.489***	0.294***	0.493***
$I C R_{i t}$		−0.115**	−0.186*	−0.090*	−0.144
$C R_{i t - 2}$		−0.157**	−0.249**	−0.172***	−0.273**
$N M_{i t - 1}$		−0.062	−0.127	−0.092*	−0.157*

Variable	Expectation	Model 1		Model 2
		Probit	Logit	Probit	Logit
$N e g a t i v i t y_{i t}^{2}$	α2 < 0			−0.600***	−1.187***
$N e g a t i v i t y_{i t}$	α1 > 0	0.490***	0.912***	1.067***	2.033***
$E T R_{i t}$		−0.084**	−0.159**	−0.081**	−0.157**
$R O I C_{i t - 1}$		−0.405***	−0.688***	−0.430***	−0.749***
$A D A_{i t - 2}$		−0.233***	−0.462***	−0.179***	−0.324***
$Q R_{i t}$		0.292***	0.489***	0.294***	0.493***
$I C R_{i t}$		−0.115**	−0.186*	−0.090*	−0.144
$C R_{i t - 2}$		−0.157**	−0.249**	−0.172***	−0.273**
$N M_{i t - 1}$		−0.062	−0.127	−0.092*	−0.157*

Note(s): All models are estimated using ordered probit and logit methods. Standard errors are clustered at firm level

${N e g a t i v i t y}_{i t}$ is strongly positive and significant in all models, confirming that higher investors’ negativity increases distress probability

${N e g a t i v i t y}_{i t}^{2}$ is significantly negative, supporting the hypothesis of diminishing marginal impact of extreme negativity

Source(s): Estimated by authors

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