Table 8

2SLS Regression using instrumental variable

VariablesFirst-stage_regressionSecond-stage_regression
DV=Auditor-client distanceDV=Audit fees
Chair_NarcCEO_NarcDisKMDisMNDisKMDisMNAud_FeeAud_Fee
Ind_Avg_Chair_Narc0.88***       
(2.73)       
Ind_Avg_CEO_Narc 0.73***      
 (2.85)      
Chair_Narc  −2.58***−2.56***  5.522** 
  (−2.77)(−3.27)  (2.287) 
CEO_Narc    −1.72*−2.10*** 7.947***
    (−1.83)(−2.66) (3.301)
Constant−0.169**−0.0851.4372.576**1.9503.098***4.334***4.262***
(−2.007)(−1.058)(1.028)(2.185)(1.433)(2.707)(4.834)(4.647)
ControlsYESYESYESYESYESYESYESYES
Year_FEYESYESYESYESYESYESYESYES
Industry_FEYESYESYESYESYESYESYESYES
Observations436436436436436436436436
Adjusted_R20.1910.2500.1750.1830.1680.1810.4750.482

Note(s): Table 8 reports the two-stage least square (2SLS) regression results using instrumental variable. Coefficients are presented with t-statistics in parentheses. Variable definitions are provided in  Appendix. ***, **, and * indicate significance at the 1%, 5%, and 10% levels, respectively. DV stands for dependent variable

Source(s): Authors' construction
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