Table 3. Family-firm related effect of...

Table 3.

Family-firm related effect of LMR on cash holdings

	Cash		CashToNetAssets
Dependent variable	(1)	(2)	(3)	(4)
LMR	–0.002 (−1.07)	–0.004** (−2.56)	–0.009* (−1.83)	–0.016** (−2.66)
LMR#FFF		0.007*** (3.36)		0.024** (2.28)
FFF		–0.027*** (−5.25)		–0.088*** (−3.92)
Size $_{(t - 1)}$	–0.025*** (−3.68)	–0.025*** (−3.66)	–0.044* (−1.76)	–0.044 (−1.74)
Growth $_{(t - 1)}$	0.004*** (3.43)	0.004*** (3.47)	0.016*** (3.47)	0.016*** (3.48)
Leverage $_{(t - 1)}$	–0.089*** (−11.41)	–0.089*** (−11.39)	–0.219*** (−6.25)	–0.219*** (−6.19)
NWC $_{(t - 1)}$	–0.048** (−2.29)	–0.048** (−2.29)	–0.157** (−2.61)	–0.157** (−2.61)
Investments $_{(t - 1)}$	–0.053*** (−3.09)	–0.053*** (−3.08)	–0.139** (−2.58)	–0.139** (−2.56)
Dividends $_{(t - 1)}$	0.005*** (3.20)	0.005*** (3.21)	0.009 (1.71)	0.009 (1.69)
Cash flow $_{(t - 1)}$	0.014 (1.10)	0.014 (1.10)	0.015 (0.30)	0.014 (0.30)
Cash flow volatility $_{(t - 1)}$	0.009 (1.39)	0.009 (1.39)	0.036* (1.79)	0.036* (1.79)
Other ultimate owner	0.001 (0.22)	0.001 (0.32)	0.005 (0.37)	0.006 (0.48)
Inflation $_{(t - 1)}$	–0.080 (−1.08)	–0.081 (−1.08)	0.096 (0.34)	0.094 (0.33)
GDP growth $_{(t - 1)}$	–0.047 (−1.36)	–0.043 (−1.23)	–0.044 (−0.29)	–0.033 (−0.21)
ln(GDP p.c.) $_{(t - 1)}$	0.085*** (3.04)	0.085*** (3.01)	0.070 (0.67)	0.069 (0.66)
Firm fixed effects	Yes	Yes	Yes	Yes
Industry-Year fixed effects	Yes	Yes	Yes	Yes
Country specific year trend	Yes	Yes	Yes	Yes
Clustered standard errors	Country-level	Country-level	Country-level	Country-level
Observations	28,113	28,113	28,113	28,113
$R_{a d j}^{2}$	0.057	0.058	0.036	0.037

	Cash		CashToNetAssets
Dependent variable	(1)	(2)	(3)	(4)
LMR	–0.002 (−1.07)	–0.004** (−2.56)	–0.009* (−1.83)	–0.016** (−2.66)
LMR#FFF		0.007*** (3.36)		0.024** (2.28)
FFF		–0.027*** (−5.25)		–0.088*** (−3.92)
Size $_{(t - 1)}$	–0.025*** (−3.68)	–0.025*** (−3.66)	–0.044* (−1.76)	–0.044 (−1.74)
Growth $_{(t - 1)}$	0.004*** (3.43)	0.004*** (3.47)	0.016*** (3.47)	0.016*** (3.48)
Leverage $_{(t - 1)}$	–0.089*** (−11.41)	–0.089*** (−11.39)	–0.219*** (−6.25)	–0.219*** (−6.19)
NWC $_{(t - 1)}$	–0.048** (−2.29)	–0.048** (−2.29)	–0.157** (−2.61)	–0.157** (−2.61)
Investments $_{(t - 1)}$	–0.053*** (−3.09)	–0.053*** (−3.08)	–0.139** (−2.58)	–0.139** (−2.56)
Dividends $_{(t - 1)}$	0.005*** (3.20)	0.005*** (3.21)	0.009 (1.71)	0.009 (1.69)
Cash flow $_{(t - 1)}$	0.014 (1.10)	0.014 (1.10)	0.015 (0.30)	0.014 (0.30)
Cash flow volatility $_{(t - 1)}$	0.009 (1.39)	0.009 (1.39)	0.036* (1.79)	0.036* (1.79)
Other ultimate owner	0.001 (0.22)	0.001 (0.32)	0.005 (0.37)	0.006 (0.48)
Inflation $_{(t - 1)}$	–0.080 (−1.08)	–0.081 (−1.08)	0.096 (0.34)	0.094 (0.33)
GDP growth $_{(t - 1)}$	–0.047 (−1.36)	–0.043 (−1.23)	–0.044 (−0.29)	–0.033 (−0.21)
ln(GDP p.c.) $_{(t - 1)}$	0.085*** (3.04)	0.085*** (3.01)	0.070 (0.67)	0.069 (0.66)
Firm fixed effects	Yes	Yes	Yes	Yes
Industry-Year fixed effects	Yes	Yes	Yes	Yes
Country specific year trend	Yes	Yes	Yes	Yes
Clustered standard errors	Country-level	Country-level	Country-level	Country-level
Observations	28,113	28,113	28,113	28,113
$R_{a d j}^{2}$	0.057	0.058	0.036	0.037

Note(s):

This table presents the OLS regression results of average (Columns 1 and 3) and FFF-related differential (Columns 2 and 4) effect of LMR on cash holdings. Column 1 and 2 (3 and 4) show the results for Cash (CashToNetAssets) as dependent variable. All variables are defined in Table A1 in the Appendix. All independent variables except LMR, FFF, and Other Ultimate Owner are lagged by one period. All regression specifications include firm fixed effects, industry-year fixed effects, and country specific year trends. The t-Statistics in parentheses are based on robust standard errors, clustered at the country level. *, **, *** denote statistical significance at the 10, 5, and 1% levels, respectively

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