Entropy balancing
| Panel A − Comparison between treated firms and control firms after entropy balancing | ||||||
|---|---|---|---|---|---|---|
| Model (1) | Treated (N = 19,621) | Control (N = 58,902) | ||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.403 | 5.235 | 5.403 | 5.235 | 0.000 | 1.000 |
| AGE | 2.683 | 0.534 | 2.683 | 0.534 | 0.000 | 1.000 |
| ROA | 0.078 | 0.044 | 0.078 | 0.044 | 0.000 | 1.000 |
| RETURN | 0.318 | 1.393 | 0.318 | 1.393 | 0.000 | 1.000 |
| INDCONC | 0.021 | 0.019 | 0.021 | 0.019 | 0.000 | 1.000 |
| Model (2) | Treated (N = 19,621) | Control (N = 58,902) | ||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.395 | 5.560 | 5.395 | 5.560 | 0.000 | 1.000 |
| AGE | 2.638 | 0.550 | 2.638 | 0.550 | 0.000 | 1.000 |
| ROA | 0.051 | 0.062 | 0.051 | 0.062 | 0.000 | 1.000 |
| RETURN | 0.351 | 1.645 | 0.351 | 1.645 | 0.000 | 1.000 |
| INDCONC | 0.026 | 0.018 | 0.026 | 0.018 | 0.000 | 1.000 |
| Model (3) | Treated (N = 19,621) | Control (N = 58,902) | ||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.417 | 5.413 | 5.417 | 5.413 | 0.000 | 1.000 |
| AGE | 2.678 | 0.554 | 2.678 | 0.554 | 0.000 | 1.000 |
| ROA | 0.055 | 0.058 | 0.055 | 0.058 | 0.000 | 1.000 |
| RETURN | 0.323 | 1.430 | 0.323 | 1.430 | 0.000 | 1.000 |
| INDCONC | 0.025 | 0.019 | 0.025 | 0.019 | 0.000 | 1.000 |
| Model (4) | Treated (N = 19,621) | Control (N = 58,902) | ||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.644 | 5.731 | 5.644 | 5.732 | 0.000 | 1.000 |
| AGE | 2.701 | 0.548 | 2.700 | 0.548 | 0.001 | 1.000 |
| ROA | 0.055 | 0.056 | 0.055 | 0.056 | 0.000 | 1.000 |
| RETURN | 0.323 | 1.588 | 0.323 | 1.588 | 0.000 | 1.000 |
| INDCONC | 0.005 | 0.014 | 0.005 | 0.014 | 0.000 | 1.000 |
| Model (5) | Treated (N = 15,181) | Control (N = 45,909) | ||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.545 | 5.401 | 5.545 | 5.401 | 0.000 | 1.000 |
| AGE | 2.728 | 0.496 | 2.728 | 0.496 | 0.000 | 1.000 |
| ROA | 0.074 | 0.044 | 0.074 | 0.044 | 0.000 | 1.000 |
| RETURN | 0.302 | 1.358 | 0.302 | 1.358 | 0.000 | 1.000 |
| INDCONC | 0.003 | 0.015 | 0.003 | 0.015 | 0.000 | 1.000 |
| CEOTURN | 0.135 | 0.117 | 0.135 | 0.117 | 0.000 | 1.000 |
| CEODUALITY | 0.588 | 0.242 | 0.588 | 0.242 | 0.000 | 1.000 |
| BOARDSIZE | 1.417 | 0.746 | 1.417 | 0.746 | 0.000 | 1.000 |
| Model (6) | Treated (N = 15,181) | Control (N = 45,909) | ||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.580 | 5.699 | 5.580 | 5.701 | 0.000 | 1.000 |
| AGE | 2.685 | 0.519 | 2.685 | 0.520 | 0.000 | 0.998 |
| ROA | 0.038 | 0.067 | 0.038 | 0.067 | 0.000 | 1.000 |
| RETURN | 0.345 | 1.698 | 0.345 | 1.697 | 0.000 | 1.001 |
| INDCONC | 0.007 | 0.015 | 0.007 | 0.015 | 0.000 | 1.000 |
| CEOTURN | 0.135 | 0.117 | 0.135 | 0.117 | 0.000 | 1.000 |
| CEODUALITY | 0.566 | 0.246 | 0.566 | 0.246 | 0.000 | 1.000 |
| BOARDSIZE | 1.421 | 0.759 | 1.421 | 0.759 | 0.000 | 1.000 |
| Model (7) | Treated (N = 15,200) | Control (N = 45,890) | ||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.571 | 5.574 | 5.571 | 5.574 | 0.000 | 1.000 |
| AGE | 2.739 | 0.514 | 2.739 | 0.514 | 0.000 | 1.000 |
| ROA | 0.044 | 0.063 | 0.044 | 0.063 | 0.000 | 1.000 |
| RETURN | 0.297 | 1.387 | 0.297 | 1.387 | 0.000 | 1.000 |
| INDCONC | 0.006 | 0.015 | 0.006 | 0.015 | 0.000 | 1.000 |
| CEOTURN | 0.136 | 0.118 | 0.136 | 0.118 | 0.000 | 1.000 |
| CEODUALITY | 0.574 | 0.245 | 0.574 | 0.245 | 0.000 | 1.000 |
| BOARDSIZE | 1.408 | 0.765 | 1.408 | 0.765 | 0.000 | 1.000 |
| Model (8) | Treated (N = 14,960) | Control (N = 46,130) | ||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.706 | 5.525 | 5.706 | 5.525 | 0.000 | 1.000 |
| AGE | 2.714 | 0.544 | 2.714 | 0.544 | 0.000 | 1.000 |
| ROA | 0.056 | 0.055 | 0.056 | 0.055 | 0.000 | 1.000 |
| RETURN | 0.325 | 1.592 | 0.325 | 1.592 | 0.000 | 1.000 |
| INDCONC | 0.003 | 0.014 | 0.003 | 0.014 | 0.000 | 1.000 |
| CEOTURN | 0.138 | 0.119 | 0.138 | 0.119 | 0.000 | 1.000 |
| CEODUALITY | 0.589 | 0.242 | 0.589 | 0.242 | 0.000 | 1.000 |
| BOARDSIZE | 1.445 | 0.755 | 1.445 | 0.755 | 0.000 | 1.000 |
| Panel A − Comparison between treated firms and control firms after entropy balancing | ||||||
|---|---|---|---|---|---|---|
| Treated ( | Control ( | |||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.403 | 5.235 | 5.403 | 5.235 | 0.000 | 1.000 |
| AGE | 2.683 | 0.534 | 2.683 | 0.534 | 0.000 | 1.000 |
| ROA | 0.078 | 0.044 | 0.078 | 0.044 | 0.000 | 1.000 |
| RETURN | 0.318 | 1.393 | 0.318 | 1.393 | 0.000 | 1.000 |
| INDCONC | 0.021 | 0.019 | 0.021 | 0.019 | 0.000 | 1.000 |
| Treated ( | Control ( | |||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.395 | 5.560 | 5.395 | 5.560 | 0.000 | 1.000 |
| AGE | 2.638 | 0.550 | 2.638 | 0.550 | 0.000 | 1.000 |
| ROA | 0.051 | 0.062 | 0.051 | 0.062 | 0.000 | 1.000 |
| RETURN | 0.351 | 1.645 | 0.351 | 1.645 | 0.000 | 1.000 |
| INDCONC | 0.026 | 0.018 | 0.026 | 0.018 | 0.000 | 1.000 |
| Treated ( | Control ( | |||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.417 | 5.413 | 5.417 | 5.413 | 0.000 | 1.000 |
| AGE | 2.678 | 0.554 | 2.678 | 0.554 | 0.000 | 1.000 |
| ROA | 0.055 | 0.058 | 0.055 | 0.058 | 0.000 | 1.000 |
| RETURN | 0.323 | 1.430 | 0.323 | 1.430 | 0.000 | 1.000 |
| INDCONC | 0.025 | 0.019 | 0.025 | 0.019 | 0.000 | 1.000 |
| Treated ( | Control ( | |||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.644 | 5.731 | 5.644 | 5.732 | 0.000 | 1.000 |
| AGE | 2.701 | 0.548 | 2.700 | 0.548 | 0.001 | 1.000 |
| ROA | 0.055 | 0.056 | 0.055 | 0.056 | 0.000 | 1.000 |
| RETURN | 0.323 | 1.588 | 0.323 | 1.588 | 0.000 | 1.000 |
| INDCONC | 0.005 | 0.014 | 0.005 | 0.014 | 0.000 | 1.000 |
| Treated ( | Control ( | |||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.545 | 5.401 | 5.545 | 5.401 | 0.000 | 1.000 |
| AGE | 2.728 | 0.496 | 2.728 | 0.496 | 0.000 | 1.000 |
| ROA | 0.074 | 0.044 | 0.074 | 0.044 | 0.000 | 1.000 |
| RETURN | 0.302 | 1.358 | 0.302 | 1.358 | 0.000 | 1.000 |
| INDCONC | 0.003 | 0.015 | 0.003 | 0.015 | 0.000 | 1.000 |
| CEOTURN | 0.135 | 0.117 | 0.135 | 0.117 | 0.000 | 1.000 |
| CEODUALITY | 0.588 | 0.242 | 0.588 | 0.242 | 0.000 | 1.000 |
| BOARDSIZE | 1.417 | 0.746 | 1.417 | 0.746 | 0.000 | 1.000 |
| Treated ( | Control ( | |||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.580 | 5.699 | 5.580 | 5.701 | 0.000 | 1.000 |
| AGE | 2.685 | 0.519 | 2.685 | 0.520 | 0.000 | 0.998 |
| ROA | 0.038 | 0.067 | 0.038 | 0.067 | 0.000 | 1.000 |
| RETURN | 0.345 | 1.698 | 0.345 | 1.697 | 0.000 | 1.001 |
| INDCONC | 0.007 | 0.015 | 0.007 | 0.015 | 0.000 | 1.000 |
| CEOTURN | 0.135 | 0.117 | 0.135 | 0.117 | 0.000 | 1.000 |
| CEODUALITY | 0.566 | 0.246 | 0.566 | 0.246 | 0.000 | 1.000 |
| BOARDSIZE | 1.421 | 0.759 | 1.421 | 0.759 | 0.000 | 1.000 |
| Treated ( | Control ( | |||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.571 | 5.574 | 5.571 | 5.574 | 0.000 | 1.000 |
| AGE | 2.739 | 0.514 | 2.739 | 0.514 | 0.000 | 1.000 |
| ROA | 0.044 | 0.063 | 0.044 | 0.063 | 0.000 | 1.000 |
| RETURN | 0.297 | 1.387 | 0.297 | 1.387 | 0.000 | 1.000 |
| INDCONC | 0.006 | 0.015 | 0.006 | 0.015 | 0.000 | 1.000 |
| CEOTURN | 0.136 | 0.118 | 0.136 | 0.118 | 0.000 | 1.000 |
| CEODUALITY | 0.574 | 0.245 | 0.574 | 0.245 | 0.000 | 1.000 |
| BOARDSIZE | 1.408 | 0.765 | 1.408 | 0.765 | 0.000 | 1.000 |
| Treated ( | Control ( | |||||
| Mean | Var | Mean | Var | Stdz.Diff. | Var. Ratio | |
| SIZE | 5.706 | 5.525 | 5.706 | 5.525 | 0.000 | 1.000 |
| AGE | 2.714 | 0.544 | 2.714 | 0.544 | 0.000 | 1.000 |
| ROA | 0.056 | 0.055 | 0.056 | 0.055 | 0.000 | 1.000 |
| RETURN | 0.325 | 1.592 | 0.325 | 1.592 | 0.000 | 1.000 |
| INDCONC | 0.003 | 0.014 | 0.003 | 0.014 | 0.000 | 1.000 |
| CEOTURN | 0.138 | 0.119 | 0.138 | 0.119 | 0.000 | 1.000 |
| CEODUALITY | 0.589 | 0.242 | 0.589 | 0.242 | 0.000 | 1.000 |
| BOARDSIZE | 1.445 | 0.755 | 1.445 | 0.755 | 0.000 | 1.000 |
| Panel B – Weighted least squared regressions of STRG | ||||||||
|---|---|---|---|---|---|---|---|---|
| Variables | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) |
| REGIN_REG | −0.092*** | −0.085*** | ||||||
| (−8.615) | (−7.408) | |||||||
| REGIN_RESP | −0.057*** | −0.067*** | ||||||
| (−6.468) | (−5.958) | |||||||
| REGIN_TIME | −0.059*** | −0.062*** | ||||||
| (−7.264) | (−6.267) | |||||||
| REGIN_DOLLAR | −0.022*** | −0.022*** | ||||||
| (−3.104) | (−3.054) | |||||||
| SIZE | −0.036** | 0.001 | 0.000 | −0.012 | −0.046** | −0.009 | −0.009 | −0.026 |
| (−2.275) | (0.084) | (0.014) | (−0.667) | (−2.357) | (−0.465) | (−0.491) | (−1.406) | |
| AGE | −0.103*** | −0.117*** | −0.121*** | −0.147*** | −0.126*** | −0.144*** | −0.141*** | −0.161*** |
| (−5.976) | (−6.372) | (−6.643) | (−6.181) | (−5.683) | (−5.738) | (−5.809) | (−6.611) | |
| ROA | −0.279*** | −0.328*** | −0.322*** | −0.309*** | −0.267*** | −0.321*** | −0.316*** | −0.297*** |
| (−18.661) | (−20.918) | (−20.544) | (−17.047) | (−14.774) | (−17.237) | (−16.820) | (−16.524) | |
| RETURN | 0.021*** | 0.025*** | 0.023*** | 0.014** | 0.012** | 0.018*** | 0.017*** | 0.012** |
| (4.062) | (4.691) | (4.343) | (2.345) | (2.134) | (2.933) | (2.797) | (2.086) | |
| INDCONC | 0.009** | 0.006* | 0.008** | 0.014*** | 0.014*** | 0.011*** | 0.012*** | 0.012*** |
| (2.361) | (1.887) | (2.307) | (3.473) | (3.525) | (3.065) | (3.642) | (3.283) | |
| CEOTURN | 0.005 | 0.001 | 0.003 | 0.003 | ||||
| (1.149) | (0.294) | (0.591) | (0.595) | |||||
| CEODUALITY | −0.003 | −0.004 | −0.003 | −0.001 | ||||
| (−0.398) | (−0.461) | (−0.359) | (−0.133) | |||||
| BOARDSIZE | 0.026** | 0.036*** | 0.035*** | 0.031*** | ||||
| (2.560) | (3.176) | (3.340) | (2.791) | |||||
| Constant | 0.522*** | 0.352*** | 0.369*** | 0.327*** | 0.359** | 0.307** | 0.257* | 0.347*** |
| (11.961) | (10.220) | (10.773) | (7.481) | (2.486) | (2.278) | (1.856) | (7.916) | |
| Observations | 78,523 | 78,523 | 78,523 | 64,378 | 61,090 | 61,090 | 61,090 | 60,021 |
| Adj. R-squared | 0.492 | 0.539 | 0.539 | 0.546 | 0.515 | 0.567 | 0.568 | 0.547 |
| Year fixed effect | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Firm fixed effect | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Clustered std err by firm | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Panel B – Weighted least squared regressions of STRG | ||||||||
|---|---|---|---|---|---|---|---|---|
| Variables | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) |
| REGIN_REG | −0.092*** | −0.085*** | ||||||
| (−8.615) | (−7.408) | |||||||
| REGIN_RESP | −0.057*** | −0.067*** | ||||||
| (−6.468) | (−5.958) | |||||||
| REGIN_TIME | −0.059*** | −0.062*** | ||||||
| (−7.264) | (−6.267) | |||||||
| REGIN_DOLLAR | −0.022*** | −0.022*** | ||||||
| (−3.104) | (−3.054) | |||||||
| SIZE | −0.036** | 0.001 | 0.000 | −0.012 | −0.046** | −0.009 | −0.009 | −0.026 |
| (−2.275) | (0.084) | (0.014) | (−0.667) | (−2.357) | (−0.465) | (−0.491) | (−1.406) | |
| AGE | −0.103*** | −0.117*** | −0.121*** | −0.147*** | −0.126*** | −0.144*** | −0.141*** | −0.161*** |
| (−5.976) | (−6.372) | (−6.643) | (−6.181) | (−5.683) | (−5.738) | (−5.809) | (−6.611) | |
| ROA | −0.279*** | −0.328*** | −0.322*** | −0.309*** | −0.267*** | −0.321*** | −0.316*** | −0.297*** |
| (−18.661) | (−20.918) | (−20.544) | (−17.047) | (−14.774) | (−17.237) | (−16.820) | (−16.524) | |
| RETURN | 0.021*** | 0.025*** | 0.023*** | 0.014** | 0.012** | 0.018*** | 0.017*** | 0.012** |
| (4.062) | (4.691) | (4.343) | (2.345) | (2.134) | (2.933) | (2.797) | (2.086) | |
| INDCONC | 0.009** | 0.006* | 0.008** | 0.014*** | 0.014*** | 0.011*** | 0.012*** | 0.012*** |
| (2.361) | (1.887) | (2.307) | (3.473) | (3.525) | (3.065) | (3.642) | (3.283) | |
| CEOTURN | 0.005 | 0.001 | 0.003 | 0.003 | ||||
| (1.149) | (0.294) | (0.591) | (0.595) | |||||
| CEODUALITY | −0.003 | −0.004 | −0.003 | −0.001 | ||||
| (−0.398) | (−0.461) | (−0.359) | (−0.133) | |||||
| BOARDSIZE | 0.026** | 0.036*** | 0.035*** | 0.031*** | ||||
| (2.560) | (3.176) | (3.340) | (2.791) | |||||
| Constant | 0.522*** | 0.352*** | 0.369*** | 0.327*** | 0.359** | 0.307** | 0.257* | 0.347*** |
| (11.961) | (10.220) | (10.773) | (7.481) | (2.486) | (2.278) | (1.856) | (7.916) | |
| Observations | 78,523 | 78,523 | 78,523 | 64,378 | 61,090 | 61,090 | 61,090 | 60,021 |
| Adj. | 0.492 | 0.539 | 0.539 | 0.546 | 0.515 | 0.567 | 0.568 | 0.547 |
| Year fixed effect | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Firm fixed effect | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Clustered std err by firm | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Note(s): This table presents the results of the Entropy balancing approach. We use the 4th quartile of the sample distribution of REGIN_REG/REGIN_RESP/EGIN_TIME/REGIN_DOLLAR to define firms with higher levels of regulatory intensity (treated firms) and lower levels of regulatory intensity (control firms). Panel A compares the distributional moments for the control variables after balancing the treated and control firms. Model numbers indicate which baseline model is used. Std.Diff. is the difference in the mean values of the control variables between the treated and the control samples, standardized by the standard deviations of the corresponding variables of the treated sample. Var. Ratio is the ratio of variance in the treated sample to the variance in the control sample. Panel B shows the regression results using the Entropy-balanced sample. Refer to Appendix A for detailed variable definitions. We winsorize all continuous variables at the upper and lower 1% of the sample distribution. ***, ** and * indicate significance at the 1%, 5% and 10% levels, respectively
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