Table 13

Difference in alternative measures of firm profitability between normal capitalization and expense-all firms

Earnings before interest and taxModified ROA
EBITi,t+1EBITi,t+2EBITi,t+3MROAi,t+1MROAi,t+2MROAi,t+3
NMCi,t−0.006***−0.008***−0.005**−0.005***−0.006***−0.004**
(−6.39)(−4.70)(−2.29)(−6.28)(−4.24)(−2.04)
EBITi,t0.593***0.479***0.422***   
(42.35)(23.81)(15.69)   
MROAi,t   0.670***0.533***0.473***
   (52.11)(25.81)(17.53)
Sizei,t0.006***0.006***0.004***0.005***0.005***0.004***
(10.52)(6.11)(3.59)(10.07)(5.50)(3.43)
Levi,t−0.021***−0.026***−0.019***−0.023***−0.027***−0.020***
(−7.35)(−5.55)(−3.00)(−9.00)(−6.10)(−3.46)
MBi,t0.012***0.008***0.0030.009***0.006***0.003
(10.60)(4.55)(1.23)(10.23)(4.10)(1.55)
Growthi,t0.011***−0.002−0.013***0.002−0.010***−0.021***
(4.49)(−0.47)(−3.13)(1.14)(−3.11)(−5.10)
RDinti,t0.441***0.536***0.563***0.348***0.483***0.493***
(11.68)(9.38)(7.13)(10.80)(9.06)(6.70)
Constant−0.095***−0.050**−0.064**−0.083***−0.061***−0.068***
(−6.10)(−2.08)(−2.15)(−7.28)(−3.54)(−2.70)
Fixed Effects
IndustryYESYESYESYESYESYES
YearYESYESYESYESYESYES
# of Obs.10,3357,5745,36710,3497,6085,393
Adj. R20.5050.3340.2420.5940.3820.277

Note(s): All variables are defined in Appendix. The robust t statistics shown in parentheses are based on the firm-clustered standard errors. *, ** and *** represent the statistical significance level of 10%, 5% and 1%, respectively

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