Table 7 Instrument variable approach...

Table 7

Instrument variable approach

Variables	(1)		(2)	(3)		(4)	(5)	(6)	(7)	(8)
Panel A – Stage 1
IND_REGIN_REG	0.875***						0.874***
IND_REGIN_REG	(76.30)						(69.79)
STATE_REGIN_REG	0.082***						0.081***
STATE_REGIN_REG	(3.30)						(2.86)
IND_REGIN_RESP			0.926***					0.940***
IND_REGIN_RESP			(100.20)					(109.03)
STATE_REGIN_RESP			0.066***					0.070***
STATE_REGIN_RESP			(2.59)					(3.20)
IND_TIME				0.930***					0.943***
IND_TIME				(92.70)					(97.91)
STATE_TIME				0.079***					0.072***
STATE_TIME				(3.21)					(2.93)
IND_DOLLAR						0.949***				0.954***
IND_DOLLAR						(102.32)				(101.99)
STATE_DOLLAR						0.038*				0.038*
STATE_DOLLAR						(1.92)				(1.84)
SIZE	0.081*		0.127*	0.217***		0.155*	0.088	0.123*	0.163**	0.178*
SIZE	(1.83)		(1.73)	(3.21)		(1.68)	(1.59)	(1.67)	(2.25)	(1.81)
AGE	0.353**		−0.586*	−0.574*		−1.161**	0.460**	−0.703**	−0.547*	−1.217**
AGE	(2.00)		(−1.65)	(−1.82)		(−2.56)	(2.22)	(−2.06)	(−1.70)	(−2.54)
ROA	2.950***		3.228***	2.887***		2.328***	3.106***	3.573***	3.152***	2.320***
ROA	(7.57)		(6.09)	(5.90)		(3.57)	(6.75)	(6.40)	(5.98)	(3.63)
RETURN	−0.180***		−0.169***	−0.197***		−0.150***	−0.140***	−0.130***	−0.154***	−0.136**
RETURN	(−4.83)		(−3.72)	(−4.61)		(−2.72)	(−3.37)	(−2.76)	(−3.35)	(−2.46)
INDCONC	−0.224		0.136	−0.060		−0.567	−0.353	−0.179	−0.126	−0.632
INDCONC	(−1.03)		(0.36)	(−0.17)		(−1.08)	(−1.50)	(−0.58)	(−0.40)	(−1.17)
CEOTURN							0.266***	0.345***	0.228*	0.120
CEOTURN							(2.84)	(2.70)	(1.91)	(0.70)
CEODUALITY							0.053	−0.082	−0.108	0.342
CEODUALITY							(0.44)	(−0.46)	(−0.67)	(1.40)
BOARDSIZE							−0.094	−0.073	−0.068	−0.131
BOARDSIZE							(−0.87)	(−0.50)	(−0.50)	(−0.67)
Constant	2.784		1.510	−0.610		3.421	2.798	0.219	−0.825	3.030
Constant	(1.09)		(0.57)	(−0.23)		(1.42)	(0.94)	(0.09)	(−0.31)	(1.19)
Observations	77,356		77,356	77,356		63,013	59,993	59,993	59,993	58,784
Adj. R−squared	0.721		0.816	0.785		0.794	0.689	0.858	0.812	0.799
F-statistics	915.4		1,544	1,311		1,690	560.8	1,404	1,043	1,199
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 – Stage 2
REGIN_REG	−0.001**						−0.001**
REGIN_REG	(−2.99)						(−2.12)
REGIN_RESP		−0.001**						−0.001**
REGIN_RESP		(−2.09)						(−2.11)
REGIN_TIME				−0.000*					−0.000*
REGIN_TIME				(−1.81)					(−1.87)
REGIN_DOLLAR					−0.000*					−0.000**
REGIN_DOLLAR					(−1.93)					(−2.25)
SIZE	−0.001	−0.000		−0.000	0.002		−0.001	−0.001	−0.001	−0.001
SIZE	(−0.39)	(−0.25)		(−0.29)	(0.86)		(−0.74)	(−0.61)	(−0.64)	(−0.49)
AGE	−0.086***	−0.086***		−0.087***	−0.111***		−0.115***	−0.117***	−0.117***	−0.119***
AGE	(−12.72)	(−12.80)		(−12.90)	(−13.06)		(−12.86)	(−13.06)	(−13.08)	(−13.13)
ROA	−0.719***	−0.719***		−0.720***	−0.717***		−0.693***	−0.693***	−0.695***	−0.699***
ROA	(−73.91)	(−74.04)		(−74.33)	(−65.91)		(−61.15)	(−61.31)	(−61.61)	(−61.50)
RETURN	0.011***	0.011***		0.012***	0.009***		0.008***	0.008***	0.008***	0.008***
RETURN	(9.77)	(9.77)		(9.82)	(6.77)		(6.04)	(6.01)	(6.07)	(5.97)
INDCONC	0.023*	0.024**		0.024**	0.047***		0.049***	0.051***	0.051***	0.051***
INDCONC	(1.89)	(2.04)		(1.97)	(3.31)		(3.40)	(3.53)	(3.49)	(3.47)
CEOTURN							0.002	0.002	0.002	0.001
CEOTURN							(0.34)	(0.32)	(0.30)	(0.18)
CEODUALITY							−0.001	−0.002	−0.001	−0.002
CEODUALITY							(−0.24)	(−0.29)	(−0.26)	(−0.30)
BOARDSIZE							0.019***	0.020***	0.019***	0.020***
BOARDSIZE							(4.39)	(4.43)	(4.40)	(4.52)
Observations	77,356	77,356		77,356	63,013		59,993	59,993	59,993	58,784
R-squared	0.083	0.082		0.082	0.079		0.078	0.077	0.076	0.076
F-statistics	1,025	1,025		1,024	808.1		486.3	485.9	485.1	482.1
Sargan p-value	0.969	0.9775		0.407	0.506		0.818	0.7692	0.524	0.416
Sargan stats	0.002	0.001		0.687	0.442		0.053	0.086	0.406	0.661
Kleibergen-Paap rk Wald F statistic	15000.00	6945.04		34000.00	51000.00		12000.00	6297.47	32000.00	5406.31
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

Variables	(1)		(2)	(3)		(4)	(5)	(6)	(7)	(8)
Panel A – Stage 1
IND_REGIN_REG	0.875***						0.874***
IND_REGIN_REG	(76.30)						(69.79)
STATE_REGIN_REG	0.082***						0.081***
STATE_REGIN_REG	(3.30)						(2.86)
IND_REGIN_RESP			0.926***					0.940***
IND_REGIN_RESP			(100.20)					(109.03)
STATE_REGIN_RESP			0.066***					0.070***
STATE_REGIN_RESP			(2.59)					(3.20)
IND_TIME				0.930***					0.943***
IND_TIME				(92.70)					(97.91)
STATE_TIME				0.079***					0.072***
STATE_TIME				(3.21)					(2.93)
IND_DOLLAR						0.949***				0.954***
IND_DOLLAR						(102.32)				(101.99)
STATE_DOLLAR						0.038*				0.038*
STATE_DOLLAR						(1.92)				(1.84)
SIZE	0.081*		0.127*	0.217***		0.155*	0.088	0.123*	0.163**	0.178*
SIZE	(1.83)		(1.73)	(3.21)		(1.68)	(1.59)	(1.67)	(2.25)	(1.81)
AGE	0.353**		−0.586*	−0.574*		−1.161**	0.460**	−0.703**	−0.547*	−1.217**
AGE	(2.00)		(−1.65)	(−1.82)		(−2.56)	(2.22)	(−2.06)	(−1.70)	(−2.54)
ROA	2.950***		3.228***	2.887***		2.328***	3.106***	3.573***	3.152***	2.320***
ROA	(7.57)		(6.09)	(5.90)		(3.57)	(6.75)	(6.40)	(5.98)	(3.63)
RETURN	−0.180***		−0.169***	−0.197***		−0.150***	−0.140***	−0.130***	−0.154***	−0.136**
RETURN	(−4.83)		(−3.72)	(−4.61)		(−2.72)	(−3.37)	(−2.76)	(−3.35)	(−2.46)
INDCONC	−0.224		0.136	−0.060		−0.567	−0.353	−0.179	−0.126	−0.632
INDCONC	(−1.03)		(0.36)	(−0.17)		(−1.08)	(−1.50)	(−0.58)	(−0.40)	(−1.17)
CEOTURN							0.266***	0.345***	0.228*	0.120
CEOTURN							(2.84)	(2.70)	(1.91)	(0.70)
CEODUALITY							0.053	−0.082	−0.108	0.342
CEODUALITY							(0.44)	(−0.46)	(−0.67)	(1.40)
BOARDSIZE							−0.094	−0.073	−0.068	−0.131
BOARDSIZE							(−0.87)	(−0.50)	(−0.50)	(−0.67)
Constant	2.784		1.510	−0.610		3.421	2.798	0.219	−0.825	3.030
Constant	(1.09)		(0.57)	(−0.23)		(1.42)	(0.94)	(0.09)	(−0.31)	(1.19)
Observations	77,356		77,356	77,356		63,013	59,993	59,993	59,993	58,784
Adj. R−squared	0.721		0.816	0.785		0.794	0.689	0.858	0.812	0.799
F-statistics	915.4		1,544	1,311		1,690	560.8	1,404	1,043	1,199
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 – Stage 2
REGIN_REG	−0.001**						−0.001**
REGIN_REG	(−2.99)						(−2.12)
REGIN_RESP		−0.001**						−0.001**
REGIN_RESP		(−2.09)						(−2.11)
REGIN_TIME				−0.000*					−0.000*
REGIN_TIME				(−1.81)					(−1.87)
REGIN_DOLLAR					−0.000*					−0.000**
REGIN_DOLLAR					(−1.93)					(−2.25)
SIZE	−0.001	−0.000		−0.000	0.002		−0.001	−0.001	−0.001	−0.001
SIZE	(−0.39)	(−0.25)		(−0.29)	(0.86)		(−0.74)	(−0.61)	(−0.64)	(−0.49)
AGE	−0.086***	−0.086***		−0.087***	−0.111***		−0.115***	−0.117***	−0.117***	−0.119***
AGE	(−12.72)	(−12.80)		(−12.90)	(−13.06)		(−12.86)	(−13.06)	(−13.08)	(−13.13)
ROA	−0.719***	−0.719***		−0.720***	−0.717***		−0.693***	−0.693***	−0.695***	−0.699***
ROA	(−73.91)	(−74.04)		(−74.33)	(−65.91)		(−61.15)	(−61.31)	(−61.61)	(−61.50)
RETURN	0.011***	0.011***		0.012***	0.009***		0.008***	0.008***	0.008***	0.008***
RETURN	(9.77)	(9.77)		(9.82)	(6.77)		(6.04)	(6.01)	(6.07)	(5.97)
INDCONC	0.023*	0.024**		0.024**	0.047***		0.049***	0.051***	0.051***	0.051***
INDCONC	(1.89)	(2.04)		(1.97)	(3.31)		(3.40)	(3.53)	(3.49)	(3.47)
CEOTURN							0.002	0.002	0.002	0.001
CEOTURN							(0.34)	(0.32)	(0.30)	(0.18)
CEODUALITY							−0.001	−0.002	−0.001	−0.002
CEODUALITY							(−0.24)	(−0.29)	(−0.26)	(−0.30)
BOARDSIZE							0.019***	0.020***	0.019***	0.020***
BOARDSIZE							(4.39)	(4.43)	(4.40)	(4.52)
Observations	77,356	77,356		77,356	63,013		59,993	59,993	59,993	58,784
R-squared	0.083	0.082		0.082	0.079		0.078	0.077	0.076	0.076
F-statistics	1,025	1,025		1,024	808.1		486.3	485.9	485.1	482.1
Sargan p-value	0.969	0.9775		0.407	0.506		0.818	0.7692	0.524	0.416
Sargan stats	0.002	0.001		0.687	0.442		0.053	0.086	0.406	0.661
Kleibergen-Paap rk Wald F statistic	15000.00	6945.04		34000.00	51000.00		12000.00	6297.47	32000.00	5406.31
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 instrumental variable regression. In the first stage, we instrument regulatory intensity proxies with the median values of the regulatory intensity proxies for firms in the same state and the median values of the regulatory intensity proxies for firms in the same industry (defined using the three-digit SIC codes) as the focal firm, excluding the focal firm itself, as two instrumental variables. Panel A displays the results. In the second stage, we replace regulatory intensity proxies with their predicted values from the first stage. Panel B displays the results. 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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