Table 4 Multivariate DID regression of...

Table 4

Multivariate DID regression of different M&A classifications

	Cross-industry deals			All deals			Within-industry deals
	Ln_(1 + Count)			Ln_(1 + Count)			Ln_(1 + Count)
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
Panel A: Multivariate DID regression result of M&As classified by diversification
Intercept	−0.053	−0.190***	−0.190*	−0.116***	−0.126	−0.127	0.021	−0.068	−0.068
Intercept	(−1.33)	(−1.89)	(−1.88)	(−3.10)	(−1.34)	(−1.34)	(0.63)	(−0.73)	(−0.73)
Pilot × During	−0.056**	−0.058**	−0.057**	−0.031	−0.035	−0.035	0.003	−0.005	−0.005
Pilot × During	(−2.52)	(−2.57)	(−2.56)	(−1.43)	(−1.60)	(−1.59)	(0.12)	(−0.24)	(−0.23)
Pilot × After	−0.025	−0.019	−0.019	−0.015	−0.014	−0.014	0.010	0.004	0.004
Pilot × After	(−1.07)	(−0.78)	(−0.78)	(−0.62)	(−0.56)	(−0.56)	(0.42)	(0.16)	(0.16)
Pilot	0.020			0.005			−0.017
Pilot	(1.06)			(0.27)			(−1.03)
During	0.003	0.009	0.009	−0.012	0.006	0.006	−0.007	0.003	0.003
During	(0.23)	(0.59)	(0.59)	(−0.92)	(0.41)	(0.40)	(−0.57)	(0.19)	(0.19)
After	−0.065*** (−4.44)	−0.044*** (−2.70)	−0.044*** (−2.70)	−0.076*** (−5.25)	−0.042** (−2.53)	−0.042** (−2.53)	−0.053*** (−3.92)	−0.021 (−1.33)	−0.021 (−1.33)
ROA	−0.165***	0.074	0.074	−0.072	0.082	0.082	−0.014	0.094	0.094
ROA	(−2.72)	(1.06)	(1.05)	(−1.43)	(1.29)	(1.28)	(−0.30)	(1.39)	(1.39)
MB_Ratio	−0.005**	−0.002	−0.002	−0.006***	−0.003*	−0.003*	−0.004***p	−0.002	−0.002
MB_Ratio	(−2.21)	(−0.94)	(−0.94)	(−3.84)	(−1.76)	(−1.75)	(−2.62)	(−1.33)	(−1.33)
Leverage	−0.038*	−0.059*	−0.059*	−0.071***	−0.044	−0.044	−0.037* (−1.95)	−0.025 (−0.81)	−0.025 (−0.81)
Leverage	(−1.68)	(−1.86)	(−1.86)	(−3.47)	(−1.49)	(−1.49)	−0.037* (−1.95)	−0.025 (−0.81)	−0.025 (−0.81)
Ln_MV	0.060***	0.070***	0.070***	0.010***	0.113***	0.113***	0.069***	0.097***	0.097***
Ln_MV	(7.14)	(6.15)	(6.12)	(12.77)	(11.82)	(11.79)	(9.29)	(10.52)	(10.49)
Ln_Sales	−0.003	−0.004	−0.004	−0.013	−0.036**	−0.036**	−0.023***	−0.047***	−0.047***
Ln_Sales	(−0.33)	(−0.22)	(−0.22)	(−1.63)	(−2.28)	(−2.27)	(−3.18)	(−3.00)	(−3.00)
CAPEX	−0.209***	0.256**	0.256**	−0.132*** (−3.05)	0.177*** (3.13)	0.177*** (3.13)	−0.001 (−0.02)	0.156*** (2.71)	0.156*** (2.70)
CAPEX	(−2.80)	(2.53)	(2.52)	−0.132*** (−3.05)	0.177*** (3.13)	0.177*** (3.13)	−0.001 (−0.02)	0.156*** (2.71)	0.156*** (2.70)
RDX	0.033 (0.76)	0.075 (1.15)	0.075 (1.14)	0.004 (0.16)	0.049* (1.69)	0.049* (1.68)	−0.030 (−0.99)	0.066* (1.73)	0.066* (1.72)
Cash	−0.037*** (−3.04)	−0.003 (−0.24)	−0.003 (−0.24)	−0.026*** (−3.15)	−0.025*** (−2.70)	−0.025*** (−2.69)	−0.018* (−1.75)	−0.034*** (−2.82)	−0.034*** (−2.82)
Fixed effect	No	Firm	Firm & Industry	No	Firm	Firm & Industry	No	Firm	Firm & Industry
Cluster standard error	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
R²	0.047	0.319	0.319	0.079	0.370	0.370	0.039	0.307	0.307
Obs	9,092	9,092	9,092	13,265	13,265	13,265	10,849	10,849	10,849
Pilot (control) firms	400 (754)	400 (754)	400 (754)	584 (1,150)	584 (1,150)	584 (1,150)	473 (934)	473 (934)	473 (934)

	Cross-industry deals			All deals			Within-industry deals
	Ln_(1 + Count)			Ln_(1 + Count)			Ln_(1 + Count)
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
Panel A: Multivariate DID regression result of M&As classified by diversification
Intercept	−0.053	−0.190***	−0.190*	−0.116***	−0.126	−0.127	0.021	−0.068	−0.068
Intercept	(−1.33)	(−1.89)	(−1.88)	(−3.10)	(−1.34)	(−1.34)	(0.63)	(−0.73)	(−0.73)
Pilot × During	−0.056**	−0.058**	−0.057**	−0.031	−0.035	−0.035	0.003	−0.005	−0.005
Pilot × During	(−2.52)	(−2.57)	(−2.56)	(−1.43)	(−1.60)	(−1.59)	(0.12)	(−0.24)	(−0.23)
Pilot × After	−0.025	−0.019	−0.019	−0.015	−0.014	−0.014	0.010	0.004	0.004
Pilot × After	(−1.07)	(−0.78)	(−0.78)	(−0.62)	(−0.56)	(−0.56)	(0.42)	(0.16)	(0.16)
Pilot	0.020			0.005			−0.017
Pilot	(1.06)			(0.27)			(−1.03)
During	0.003	0.009	0.009	−0.012	0.006	0.006	−0.007	0.003	0.003
During	(0.23)	(0.59)	(0.59)	(−0.92)	(0.41)	(0.40)	(−0.57)	(0.19)	(0.19)
After	−0.065*** (−4.44)	−0.044*** (−2.70)	−0.044*** (−2.70)	−0.076*** (−5.25)	−0.042** (−2.53)	−0.042** (−2.53)	−0.053*** (−3.92)	−0.021 (−1.33)	−0.021 (−1.33)
ROA	−0.165***	0.074	0.074	−0.072	0.082	0.082	−0.014	0.094	0.094
ROA	(−2.72)	(1.06)	(1.05)	(−1.43)	(1.29)	(1.28)	(−0.30)	(1.39)	(1.39)
MB_Ratio	−0.005**	−0.002	−0.002	−0.006***	−0.003*	−0.003*	−0.004***p	−0.002	−0.002
MB_Ratio	(−2.21)	(−0.94)	(−0.94)	(−3.84)	(−1.76)	(−1.75)	(−2.62)	(−1.33)	(−1.33)
Leverage	−0.038*	−0.059*	−0.059*	−0.071***	−0.044	−0.044	−0.037* (−1.95)	−0.025 (−0.81)	−0.025 (−0.81)
Leverage	(−1.68)	(−1.86)	(−1.86)	(−3.47)	(−1.49)	(−1.49)	−0.037* (−1.95)	−0.025 (−0.81)	−0.025 (−0.81)
Ln_MV	0.060***	0.070***	0.070***	0.010***	0.113***	0.113***	0.069***	0.097***	0.097***
Ln_MV	(7.14)	(6.15)	(6.12)	(12.77)	(11.82)	(11.79)	(9.29)	(10.52)	(10.49)
Ln_Sales	−0.003	−0.004	−0.004	−0.013	−0.036**	−0.036**	−0.023***	−0.047***	−0.047***
Ln_Sales	(−0.33)	(−0.22)	(−0.22)	(−1.63)	(−2.28)	(−2.27)	(−3.18)	(−3.00)	(−3.00)
CAPEX	−0.209***	0.256**	0.256**	−0.132*** (−3.05)	0.177*** (3.13)	0.177*** (3.13)	−0.001 (−0.02)	0.156*** (2.71)	0.156*** (2.70)
CAPEX	(−2.80)	(2.53)	(2.52)	−0.132*** (−3.05)	0.177*** (3.13)	0.177*** (3.13)	−0.001 (−0.02)	0.156*** (2.71)	0.156*** (2.70)
RDX	0.033 (0.76)	0.075 (1.15)	0.075 (1.14)	0.004 (0.16)	0.049* (1.69)	0.049* (1.68)	−0.030 (−0.99)	0.066* (1.73)	0.066* (1.72)
Cash	−0.037*** (−3.04)	−0.003 (−0.24)	−0.003 (−0.24)	−0.026*** (−3.15)	−0.025*** (−2.70)	−0.025*** (−2.69)	−0.018* (−1.75)	−0.034*** (−2.82)	−0.034*** (−2.82)
Fixed effect	No	Firm	Firm & Industry	No	Firm	Firm & Industry	No	Firm	Firm & Industry
Cluster standard error	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
R²	0.047	0.319	0.319	0.079	0.370	0.370	0.039	0.307	0.307
Obs	9,092	9,092	9,092	13,265	13,265	13,265	10,849	10,849	10,849
Pilot (control) firms	400 (754)	400 (754)	400 (754)	584 (1,150)	584 (1,150)	584 (1,150)	473 (934)	473 (934)	473 (934)

	Negative CAR deals			Positive CAR deals
	Ln_(1 + Count)			Ln_(1 + Count)
	(1)	(2)	(3)	(4)	(5)	(6)
Panel B: Multivariate DID regression result of M&As classified by CAR
Intercept	−0.184***	−0.773*** (−7.57)	−0.773*** (−7.56)	0.162*** (6.19)	0.712*** (7.11)	0.712*** (7.09)
Intercept	(−4.98)	−0.773*** (−7.57)	−0.773*** (−7.56)	0.162*** (6.19)	0.712*** (7.11)	0.712*** (7.09)
Pilot × During	−0.062*** (−2.61)	−0.067*** (−2.78)	−0.067*** (−2.78)	0.031 (1.27)	0.034 (1.41)	0.034 (1.41)
Pilot × After	−0.041 (−1.59)	−0.039 (−1.50)	−0.039 (−1.50)	0.030 (1.18)	0.031 (1.21)	0.031 (1.21)
Pilot	0.014 (0.77)			−0.019 (−1.16)
During	−0.023 (−1.64)	−0.045*** (−3.02)	−0.045*** (−3.01)	0.021 (1.42)	0.081*** (5.01)	0.081*** (4.99)
After	−0.050*** (−3.37)	−0.053*** (−3.13)	−0.053*** (−3.12)	−0.054*** (−3.53)	0.011 (0.63)	0.011 (0.63)
ROA	0.079 (1.58)	0.235*** (3.51)	0.235*** (3.50)	−0.192*** (−3.86)	−0.159** (−2.06)	−0.159** (−2.05)
MB_Ratio	0.000 (0.24)	0.002 (1.05)	0.002 (1.04)	−0.012*** (−5.91)	−0.010*** (−4.96)	−0.010*** (−4.95)
Leverage	−0.039* (−1.84)	0.006 (0.20)	0.006 (0.20)	−0.046*** (−2.94)	−0.065** (−2.04)	−0.065** (−2.03)
Ln_MV	0.114*** (15.28)	0.172*** (17.11)	0.172*** (17.06)	0.003 (0.39)	−0.040*** (−3.78)	−0.040*** (−3.77)
Ln_Sales	−0.038*** (−5.35)	−0.021 (−1.25)	−0.021 (−1.25)	0.018*** (2.59)	−0.026 (−1.50)	−0.026 (−1.49)
CAPEX	−0.204*** (−5.20)	0.115* (1.71)	0.115* (1.70)	0.016 (0.53)	0.098* (1.90)	0.098* (1.89)
RDX	0.033 (1.18)	0.122*** (3.03)	0.122*** (3.02)	−0.024 (−0.58)	−0.008 (−0.15)	−0.008 (−0.15)
Cash	−0.031*** (−3.50)	−0.025** (−2.21)	−0.025** (−2.21)	−0.012 (−1.16)	−0.022* (−1.66)	−0.022* (−1.65)
Fixed effect	No	Firm	Firm & Industry	No	Firm	Firm & Industry
Cluster standard error	Yes	Yes	Yes	Yes	Yes	Yes
R²	0.091	0.333	0.332	0.017	0.196	0.196
Obs	11,461	11,461	11,461	8,483	8,483	8,483
Pilot (control) firms	494 (974)	494 (974)	494 (974)	376 (715)	376 (715)	376 (715)

	Negative CAR deals			Positive CAR deals
	Ln_(1 + Count)			Ln_(1 + Count)
	(1)	(2)	(3)	(4)	(5)	(6)
Panel B: Multivariate DID regression result of M&As classified by CAR
Intercept	−0.184***	−0.773*** (−7.57)	−0.773*** (−7.56)	0.162*** (6.19)	0.712***(7.11)	0.712*** (7.09)
Intercept	(−4.98)	−0.773*** (−7.57)	−0.773*** (−7.56)	0.162*** (6.19)	0.712***(7.11)	0.712*** (7.09)
Pilot × During	−0.062***(−2.61)	−0.067*** (−2.78)	−0.067*** (−2.78)	0.031 (1.27)	0.034 (1.41)	0.034 (1.41)
Pilot × After	−0.041 (−1.59)	−0.039 (−1.50)	−0.039 (−1.50)	0.030 (1.18)	0.031 (1.21)	0.031 (1.21)
Pilot	0.014 (0.77)			−0.019 (−1.16)
During	−0.023 (−1.64)	−0.045*** (−3.02)	−0.045*** (−3.01)	0.021 (1.42)	0.081*** (5.01)	0.081*** (4.99)
After	−0.050*** (−3.37)	−0.053*** (−3.13)	−0.053*** (−3.12)	−0.054*** (−3.53)	0.011 (0.63)	0.011 (0.63)
ROA	0.079 (1.58)	0.235***(3.51)	0.235***(3.50)	−0.192*** (−3.86)	−0.159** (−2.06)	−0.159** (−2.05)
MB_Ratio	0.000 (0.24)	0.002 (1.05)	0.002 (1.04)	−0.012*** (−5.91)	−0.010*** (−4.96)	−0.010*** (−4.95)
Leverage	−0.039* (−1.84)	0.006 (0.20)	0.006 (0.20)	−0.046*** (−2.94)	−0.065** (−2.04)	−0.065** (−2.03)
Ln_MV	0.114*** (15.28)	0.172***(17.11)	0.172*** (17.06)	0.003 (0.39)	−0.040*** (−3.78)	−0.040*** (−3.77)
Ln_Sales	−0.038*** (−5.35)	−0.021 (−1.25)	−0.021 (−1.25)	0.018***(2.59)	−0.026 (−1.50)	−0.026 (−1.49)
CAPEX	−0.204*** (−5.20)	0.115* (1.71)	0.115* (1.70)	0.016 (0.53)	0.098* (1.90)	0.098* (1.89)
RDX	0.033 (1.18)	0.122*** (3.03)	0.122***(3.02)	−0.024 (−0.58)	−0.008 (−0.15)	−0.008 (−0.15)
Cash	−0.031*** (−3.50)	−0.025**(−2.21)	−0.025** (−2.21)	−0.012 (−1.16)	−0.022* (−1.66)	−0.022*(−1.65)
Fixed effect	No	Firm	Firm & Industry	No	Firm	Firm & Industry
Cluster standard error	Yes	Yes	Yes	Yes	Yes	Yes
R²	0.091	0.333	0.332	0.017	0.196	0.196
Obs	11,461	11,461	11,461	8,483	8,483	8,483
Pilot (control) firms	494 (974)	494 (974)	494 (974)	376 (715)	376 (715)	376 (715)

Note(s): This table reports the results of multivariate DID regressions on the number of M&As for the pilot and the control firms over the periods before, during and after Regulation SHO's pilot program. Panel A reports the results of M&As classified by diversification, while Panel B reports the results of M&As classified by CAR. We estimate the multivariate DID panel regression as follows

$L n_(1 + C o u n t_{i, t}) = α_{0} + β_{1} P i l o t_{i} \times D u r i n g_{t} + β_{2} P i l o t_{i} \times A f t e r_{t} + β_{3} P i l o t_{i} + β_{4} D u r i n g_{t} + β_{5} A f t e r_{t} + β_{6} X_{i, t} + ε_{i, t} .$

In this model, Ln_(1 + Count_i,t) is the natural logarithm of (1 + Count_i,t), while Count_i,t is the total number of M&As announced by firm i in a given year t. Pilot_i equals one if firm i belongs to the pilot group and zero otherwise. After_t is a dummy variable that equals one if the year is during the Post period (2007 to 2010). X_i,t is the set of controlling variables including return on assets (ROA), market-to-book ratio (MB_Ratio), leverage (Leverage), size (Ln_MV), sales (Ln_Sales), capital expenditures (CAPEX), R&D expenditures (RDX) and cash and short-term investment (Cash). If we add a firm fixed effect in the panel regression, we omit Pilot_i in that column to avoid multicollinearity. We cluster the standard errors at the firm level. ^***, ^** and ^* indicate significance at the 1%, 5% and 10% level, respectively

Source(s): Table by authors

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