Table 8 Robustness tests- entropy...

Table 8

Robustness tests- entropy balancing

Panel A: Balance of covariate
Unweighted
	Treated group			Baseline group
Variables	Mean	Variance	Skewness	Mean	Variance	Skewness
Ln_TA	6.577	4.722	0.276	7.41	3.08	0.090
Leverage	0.236	0.062	1.344	0.276	0.048	0.961
ROA	0.035	0.045	−1.847	0.111	0.014	−2.682
MTB	10.1	185	1.483	8.01	165.9	1.881
TANG	0.128	0.040	2.121	0.072	0.014	3.379
Sales_Growth	0.919	7.313	1.167	0.687	5.498	1.549
Capex	0.039	0.002	2.854	0.058	0.004	2.185
B_Size	12.72	5.751	−1.647	12.97	4.416	−1.948
B_Gender_Div	29.25	74.89	−2.102	28.99	81.46	−1.971
CEO_Dual	0.599	0.0735	−0.699	0.638	0.060	−0.844
CG	80.24	535.9	−1.758	82.24	430.6	−1.98
Audit_Com	0.991	0.008	−10.6	0.992	0.007	−11.57
Audit_Tenure	11.16	38.75	0.366	11.3	32.12	0.256
Int_Intensity	0.389	0.052	−0.759	0.402	0.051	−0.887

Panel A: Balance of covariate
Unweighted
	Treated group			Baseline group
Variables	Mean	Variance	Skewness	Mean	Variance	Skewness
Ln_TA	6.577	4.722	0.276	7.41	3.08	0.090
Leverage	0.236	0.062	1.344	0.276	0.048	0.961
ROA	0.035	0.045	−1.847	0.111	0.014	−2.682
MTB	10.1	185	1.483	8.01	165.9	1.881
TANG	0.128	0.040	2.121	0.072	0.014	3.379
Sales_Growth	0.919	7.313	1.167	0.687	5.498	1.549
Capex	0.039	0.002	2.854	0.058	0.004	2.185
B_Size	12.72	5.751	−1.647	12.97	4.416	−1.948
B_Gender_Div	29.25	74.89	−2.102	28.99	81.46	−1.971
CEO_Dual	0.599	0.0735	−0.699	0.638	0.060	−0.844
CG	80.24	535.9	−1.758	82.24	430.6	−1.98
Audit_Com	0.991	0.008	−10.6	0.992	0.007	−11.57
Audit_Tenure	11.16	38.75	0.366	11.3	32.12	0.256
Int_Intensity	0.389	0.052	−0.759	0.402	0.051	−0.887

Weighted
	Treated group			Baseline group
Variables	Mean	Variance	Skewness	Mean	Variance	Skewness
Ln_TA	6.577	4.722	0.276	6.578	3.617	0.042
Leverage	0.236	0.062	1.344	0.236	0.055	1.243
ROA	0.035	0.045	−1.847	0.035	0.0491	−2.124
MTB	10.1	185	1.483	10.1	208.4	1.410
TANG	0.128	0.040	2.121	0.128	0.046	2.237
Sales_Growth	0.919	7.313	1.167	0.919	7.297	1.181
Capex	0.039	0.002	2.854	0.039	0.001	2.904
B_Size	12.72	5.75	−1.647	12.72	6.027	−1.675
B_Gender_Div	29.25	74.89	−2.102	29.25	75.41	−2.076
CEO_Dual	0.599	0.073	−0.699	0.599	0.069	−0.731
CG	80.24	535.9	−1.758	80.24	553.7	−1.753
Audit_Com	0.991	0.008	−10.6	0.991	0.0085	−10.61
Audit_Tenure	11.16	38.75	0.366	11.16	33.43	0.272
Int_Intensity	0.389	0.052	−0.759	0.389	0.053	−0.760

Weighted
	Treated group			Baseline group
Variables	Mean	Variance	Skewness	Mean	Variance	Skewness
Ln_TA	6.577	4.722	0.276	6.578	3.617	0.042
Leverage	0.236	0.062	1.344	0.236	0.055	1.243
ROA	0.035	0.045	−1.847	0.035	0.0491	−2.124
MTB	10.1	185	1.483	10.1	208.4	1.410
TANG	0.128	0.040	2.121	0.128	0.046	2.237
Sales_Growth	0.919	7.313	1.167	0.919	7.297	1.181
Capex	0.039	0.002	2.854	0.039	0.001	2.904
B_Size	12.72	5.75	−1.647	12.72	6.027	−1.675
B_Gender_Div	29.25	74.89	−2.102	29.25	75.41	−2.076
CEO_Dual	0.599	0.073	−0.699	0.599	0.069	−0.731
CG	80.24	535.9	−1.758	80.24	553.7	−1.753
Audit_Com	0.991	0.008	−10.6	0.991	0.0085	−10.61
Audit_Tenure	11.16	38.75	0.366	11.16	33.43	0.272
Int_Intensity	0.389	0.052	−0.759	0.389	0.053	−0.760

Panel B: Results from the entropy-balanced sample
	DAQ
ZCULTURE	−0.0590***
ZCULTURE	(0.0073)
All controls	Yes
Constant	−2.7701***
Constant	(0.0844)
Y/F/I/S FE	Yes
Observations	34,021
Adjusted R²	0.2075

Panel B: Results from the entropy-balanced sample
ZCULTURE	−0.0590***
(0.0073)
All controls	Yes
Constant	−2.7701***
(0.0844)
Y/F/I/S FE	Yes
Observations	34,021
Adjusted R²	0.2075

Note(s): This table reports robustness tests using entropy balancing to address potential selection bias between high- and low-culture firms. Panel A shows covariate balance before and after weighting; post-weighting, treated and baseline groups exhibit near-identical distributions. Panel B presents regressions using the weighted sample with DAQ as the dependent variable. The coefficient on zCULTURE remains negative and significant (β = −0.0590, p < 0.01), confirming that stronger culture is associated with lower earnings management. Standard errors in parentheses. *, **, and *** denote 10%, 5%, and 1% significance, respectively. All models include year, firm, industry, and state fixed effects

Source(s): The authors

[ViewLarge]

Sharing Unavailable