Table 8 Cross-sectional analysis using...

Table 8

Cross-sectional analysis using full-sample interaction models

	(1)	(2)	(3)	(4)
Variables	IO	Analyst coverage	MTB	Firm age
Ln EPU	−0.079***	−0.064*	−0.025	−0.081***
Ln EPU	(0.022)	(0.036)	(0.021)	(0.024)
High Indicator	−0.326***	−0.023	0.249**	−0.280**
High Indicator	(0.119)	(0.173)	(0.117)	(0.125)
Ln EPU*High Indicator	0.044*	0.017	−0.046*	0.055**
Ln EPU*High Indicator	(0.025)	(0.036)	(0.025)	(0.026)
LnSize	−0.039***	−0.037***	−0.041***	−0.037***
LnSize	(0.005)	(0.005)	(0.005)	(0.005)
Leverage	−0.034	−0.141***	−0.137***	−0.141***
Leverage	(0.026)	(0.023)	(0.023)	(0.023)
MTB	0.002***	0.002***	0.001*	0.002***
MTB	(0.001)	(0.001)	(0.001)	(0.001)
ROA	0.067***	0.064***	0.064***	0.065***
ROA	(0.017)	(0.017)	(0.017)	(0.017)
Cash Flow (OP)	−0.207***	−0.205***	−0.207***	−0.203***
Cash Flow (OP)	(0.024)	(0.024)	(0.024)	(0.024)
Cash Volatility	0.011	0.013	0.013	0.013
Cash Volatility	(0.008)	(0.008)	(0.008)	(0.008)
Sales Volatility	0.041**	0.047**	0.046**	0.048**
Sales Volatility	(0.019)	(0.019)	(0.019)	(0.020)
Altman's Z score	0.003**	0.003**	0.003**	0.003**
Altman's Z score	(0.001)	(0.001)	(0.001)	(0.001)
GDP Growth	−0.005*	−0.005**	−0.005*	−0.005**
GDP Growth	(0.002)	(0.002)	(0.002)	(0.002)
VIX	−0.001	−0.001	−0.001	−0.001
VIX	(0.001)	(0.001)	(0.001)	(0.001)
Constant	3.570***	3.405***	3.279***	3.546***
Constant	(0.103)	(0.168)	(0.099)	(0.110)
Observations	61,356	61,356	61,356	61,356
Adjusted R-squared	0.263	0.262	0.262	0.262
Firm FE	Yes	Yes	Yes	Yes

	(1)	(2)	(3)	(4)
Variables	IO	Analyst coverage	MTB	Firm age
Ln EPU	−0.079***	−0.064*	−0.025	−0.081***
Ln EPU	(0.022)	(0.036)	(0.021)	(0.024)
High Indicator	−0.326***	−0.023	0.249**	−0.280**
High Indicator	(0.119)	(0.173)	(0.117)	(0.125)
Ln EPU*High Indicator	0.044*	0.017	−0.046*	0.055**
Ln EPU*High Indicator	(0.025)	(0.036)	(0.025)	(0.026)
LnSize	−0.039***	−0.037***	−0.041***	−0.037***
LnSize	(0.005)	(0.005)	(0.005)	(0.005)
Leverage	−0.034	−0.141***	−0.137***	−0.141***
Leverage	(0.026)	(0.023)	(0.023)	(0.023)
MTB	0.002***	0.002***	0.001*	0.002***
MTB	(0.001)	(0.001)	(0.001)	(0.001)
ROA	0.067***	0.064***	0.064***	0.065***
ROA	(0.017)	(0.017)	(0.017)	(0.017)
Cash Flow (OP)	−0.207***	−0.205***	−0.207***	−0.203***
Cash Flow (OP)	(0.024)	(0.024)	(0.024)	(0.024)
Cash Volatility	0.011	0.013	0.013	0.013
Cash Volatility	(0.008)	(0.008)	(0.008)	(0.008)
Sales Volatility	0.041**	0.047**	0.046**	0.048**
Sales Volatility	(0.019)	(0.019)	(0.019)	(0.020)
Altman's Z score	0.003**	0.003**	0.003**	0.003**
Altman's Z score	(0.001)	(0.001)	(0.001)	(0.001)
GDP Growth	−0.005*	−0.005**	−0.005*	−0.005**
GDP Growth	(0.002)	(0.002)	(0.002)	(0.002)
VIX	−0.001	−0.001	−0.001	−0.001
VIX	(0.001)	(0.001)	(0.001)	(0.001)
Constant	3.570***	3.405***	3.279***	3.546***
Constant	(0.103)	(0.168)	(0.099)	(0.110)
Observations	61,356	61,356	61,356	61,356
Adjusted R-squared	0.263	0.262	0.262	0.262
Firm FE	Yes	Yes	Yes	Yes

Note(s): The table reports the results of pooled ordinary least squares (OLS) regressions that examine the cross-sectional impact of Economic Policy Uncertainty (Ln EPU) on corporate disclosure quality, proxied by the FSD Score. The analysis is conducted using a full-sample model with interaction terms. Specifically, the models include an indicator variable for firms with high institutional ownership (IO), high analyst coverage, high market-to-book (MTB) ratios, and high firm age (High Indicator), and examine its interaction with Ln EPU (Ln EPU*High Indicator). In all specifications, the FSD Score is the dependent variable. A comprehensive set of control variables is included to account for firm characteristics and broader economic conditions. The coefficients related to firm fixed effects are suppressed in the table for brevity. Every model includes a constant term. Robust standard errors are reported in parentheses and are clustered at the establishment level. Statistical significance is denoted by ***, **, and * for the 1%, 5%, and 10% levels, respectively. All variables are defined in Appendix 1

Source(s): Authors’ own work

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