Table 4. Cross-sectional heterogeneity...

Table 4.

Cross-sectional heterogeneity I: is it about LMR?

	Cash		CashToNetAssets		Cash		CashToNetAssets
Dependent variable	Li	Non-LI	Li	Non-LI	Domestic	Multinational	Domestic	Multinational
Sample	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
LMR	–0.007*** (−3.25)	–0.002 (−0.92)	–0.030*** (−3.63)	–0.008 (−0.75)	–0.015*** (−3.87)	–0.001 (−0.98)	–0.055*** (−3.80)	–0.008 (−1.29)
LMR#FFF	0.014*** (2.97)	0.003 (0.54)	0.043*** (3.16)	0.006 (0.37)	0.021*** (4.13)	0.005*** (3.07)	0.085*** (4.36)	0.013* (1.81)
FFF	–0.051*** (−3.61)	–0.004 (−0.15)	–0.167*** (−3.42)	0.001 (0.01)	–0.075** (−2.90)	–0.024*** (−3.80)	–0.349*** (−4.37)	–0.044* (−2.04)
Size $_{(t - 1)}$	–0.024*** (−4.94)	–0.032*** (−4.01)	–0.053*** (−3.81)	–0.055 (−1.45)	–0.030*** (−3.42)	–0.025*** (−3.63)	–0.042 (−0.99)	–0.051* (−2.06)
Growth $_{(t - 1)}$	0.003** (2.29)	0.005** (2.90)	0.007* (2.01)	0.024** (2.13)	0.005*** (3.29)	0.003** (2.78)	0.033*** (3.26)	0.010** (2.35)
Leverage $_{(t - 1)}$	–0.090*** (−9.08)	–0.086*** (−8.98)	–0.152*** (−4.52)	–0.289*** (−5.74)	–0.113*** (−4.18)	–0.079*** (−7.27)	–0.305** (−2.59)	–0.180*** (−3.51)
NWC $_{(t - 1)}$	–0.031 (−1.28)	–0.037** (−2.24)	–0.078 (−0.92)	–0.142** (−2.23)	–0.029 (−1.51)	–0.053* (−2.01)	–0.129* (−1.91)	–0.153** (−2.33)
Investments $_{(t - 1)}$	–0.051* (−1.90)	–0.050*** (−3.46)	–0.126* (−1.76)	–0.107 (−1.55)	–0.071*** (−4.25)	–0.051** (−2.33)	–0.096 (−0.77)	–0.151* (−1.99)
Dividends $_{(t - 1)}$	0.003 (1.33)	0.005 (1.74)	0.005 (0.60)	0.004 (0.53)	0.005 (1.06)	0.005** (2.80)	–0.001 (−0.04)	0.012* (1.92)
Cash flow $_{(t - 1)}$	0.003 (0.13)	0.013 (1.13)	0.029 (0.42)	–0.016 (−0.31)	0.032** (2.13)	0.008 (0.69)	0.073 (1.61)	–0.000 (−0.01)
Cash flow volatility $_{(t - 1)}$	–0.001 (−0.24)	0.009 (1.52)	0.012 (0.86)	0.018 (1.24)	0.012 (0.90)	0.010 (1.38)	0.050 (0.76)	0.034 (1.45)
Other ultimate owner	0.005 (1.27)	0.001 (0.27)	0.010 (1.08)	0.009 (0.60)	–0.003 (−0.50)	0.002 (0.43)	–0.013 (−0.53)	0.008 (0.68)
Inflation $_{(t - 1)}$	–0.089 (−0.86)	–0.089 (−0.75)	–0.129 (−0.57)	0.224 (0.44)	0.129 (0.67)	–0.078 (−0.92)	0.835 (0.80)	0.084 (0.33)
GDP growth $_{(t - 1)}$	–0.008 (−0.29)	–0.041 (−0.73)	–0.057 (−0.60)	0.033 (0.13)	–0.015 (−0.19)	–0.045 (−1.04)	–0.096 (−0.31)	0.039 (0.20)
ln(GDP p.c.) $_{(t - 1)}$	0.070 (0.99)	0.065 (1.47)	0.263 (1.73)	–0.057 (−0.29)	0.010 (0.23)	0.103*** (3.25)	0.021 (0.11)	0.030 (0.20)
Firm fixed effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry-Year fixed effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Country specific year trend	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Clustered standard errors	Country-level	Country-level	Country-level	Country-level	Country-level	Country-level	Country-level	Country-level
Observations	12,098	13,927	12,098	13,927	7,027	21,086	7,027	21,086
$R_{a d j}^{2}$	0.085	0.090	0.062	0.074	0.123	0.064	0.104	0.041

	Cash		CashToNetAssets		Cash		CashToNetAssets
Dependent variable	Li	Non-LI	Li	Non-LI	Domestic	Multinational	Domestic	Multinational
Sample	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
LMR	–0.007*** (−3.25)	–0.002 (−0.92)	–0.030*** (−3.63)	–0.008 (−0.75)	–0.015*** (−3.87)	–0.001 (−0.98)	–0.055*** (−3.80)	–0.008 (−1.29)
LMR#FFF	0.014*** (2.97)	0.003 (0.54)	0.043*** (3.16)	0.006 (0.37)	0.021*** (4.13)	0.005*** (3.07)	0.085*** (4.36)	0.013* (1.81)
FFF	–0.051*** (−3.61)	–0.004 (−0.15)	–0.167*** (−3.42)	0.001 (0.01)	–0.075** (−2.90)	–0.024*** (−3.80)	–0.349*** (−4.37)	–0.044* (−2.04)
Size $_{(t - 1)}$	–0.024*** (−4.94)	–0.032*** (−4.01)	–0.053*** (−3.81)	–0.055 (−1.45)	–0.030*** (−3.42)	–0.025*** (−3.63)	–0.042 (−0.99)	–0.051* (−2.06)
Growth $_{(t - 1)}$	0.003** (2.29)	0.005** (2.90)	0.007* (2.01)	0.024** (2.13)	0.005*** (3.29)	0.003** (2.78)	0.033*** (3.26)	0.010** (2.35)
Leverage $_{(t - 1)}$	–0.090*** (−9.08)	–0.086*** (−8.98)	–0.152*** (−4.52)	–0.289*** (−5.74)	–0.113*** (−4.18)	–0.079*** (−7.27)	–0.305** (−2.59)	–0.180*** (−3.51)
NWC $_{(t - 1)}$	–0.031 (−1.28)	–0.037** (−2.24)	–0.078 (−0.92)	–0.142** (−2.23)	–0.029 (−1.51)	–0.053* (−2.01)	–0.129* (−1.91)	–0.153** (−2.33)
Investments $_{(t - 1)}$	–0.051* (−1.90)	–0.050*** (−3.46)	–0.126* (−1.76)	–0.107 (−1.55)	–0.071*** (−4.25)	–0.051** (−2.33)	–0.096 (−0.77)	–0.151* (−1.99)
Dividends $_{(t - 1)}$	0.003 (1.33)	0.005 (1.74)	0.005 (0.60)	0.004 (0.53)	0.005 (1.06)	0.005** (2.80)	–0.001 (−0.04)	0.012* (1.92)
Cash flow $_{(t - 1)}$	0.003 (0.13)	0.013 (1.13)	0.029 (0.42)	–0.016 (−0.31)	0.032** (2.13)	0.008 (0.69)	0.073 (1.61)	–0.000 (−0.01)
Cash flow volatility $_{(t - 1)}$	–0.001 (−0.24)	0.009 (1.52)	0.012 (0.86)	0.018 (1.24)	0.012 (0.90)	0.010 (1.38)	0.050 (0.76)	0.034 (1.45)
Other ultimate owner	0.005 (1.27)	0.001 (0.27)	0.010 (1.08)	0.009 (0.60)	–0.003 (−0.50)	0.002 (0.43)	–0.013 (−0.53)	0.008 (0.68)
Inflation $_{(t - 1)}$	–0.089 (−0.86)	–0.089 (−0.75)	–0.129 (−0.57)	0.224 (0.44)	0.129 (0.67)	–0.078 (−0.92)	0.835 (0.80)	0.084 (0.33)
GDP growth $_{(t - 1)}$	–0.008 (−0.29)	–0.041 (−0.73)	–0.057 (−0.60)	0.033 (0.13)	–0.015 (−0.19)	–0.045 (−1.04)	–0.096 (−0.31)	0.039 (0.20)
ln(GDP p.c.) $_{(t - 1)}$	0.070 (0.99)	0.065 (1.47)	0.263 (1.73)	–0.057 (−0.29)	0.010 (0.23)	0.103*** (3.25)	0.021 (0.11)	0.030 (0.20)
Firm fixed effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry-Year fixed effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Country specific year trend	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Clustered standard errors	Country-level	Country-level	Country-level	Country-level	Country-level	Country-level	Country-level	Country-level
Observations	12,098	13,927	12,098	13,927	7,027	21,086	7,027	21,086
$R_{a d j}^{2}$	0.085	0.090	0.062	0.074	0.123	0.064	0.104	0.041

Note(s):

This table presents the results of OLS regression of an FFF-related differential effect of LMR on cash holdings for subsamples based on labor-intensity (Columns 1–4) and multinational presence (Columns 5–8). We measure labor-intensity of firms using the ratio of number of employees to total assets. Each year, we define firms with above (below)-median employees to total assets as high (low)-labor-intensive. We define a firm as domestic, if it does not report any foreign assets in the previous three years, and as multinational otherwise. Column 1 and 2, 5 and 6 (3 and 4, 7 and 8) 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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