Table 17 The validity of the measurement...

Table 17

The validity of the measurement of opportunistic capitalization

Panel A: The heterogeneous effect of earnings pressure on OTC1 and ROA
	(1)	(2)	(3)	(4)	(5)	(6)
	MBE_i,t = 1	MBE_i,t = 0	MBE_i,t = 1	MBE_i,t = 0	MBE_i,t = 1	MBE_i,t = 0
	ROA_i,t+1	ROA_i,t+1	ROA_i,t+2	ROA_i,t+2	ROA_i,t+3	ROA_i,t+3
OTC1_i,t	−0.008^***	0.002	−0.008^**	−0.003	−0.011^**	−0.010
OTC1_i,t	(−2.94)	(0.28)	(−2.10)	(−0.38)	(−2.41)	(−1.06)
ROA_i,t	0.395^***	0.032	0.464^***	−0.185	0.374^***	−0.082
ROA_i,t	(9.83)	(0.25)	(9.12)	(−1.33)	(5.09)	(−0.50)
Size_i,t	0.006^***	0.011	0.003	−0.032^**	0.003	−0.030
Size_i,t	(4.51)	(1.03)	(1.53)	(−2.07)	(0.96)	(−1.40)
Lev_i,t	−0.034^***	−0.039	−0.016	−0.020	−0.025^*	0.053
Lev_i,t	(−4.73)	(−0.99)	(−1.38)	(−0.46)	(−1.69)	(0.90)
MB_i,t	0.015^***	0.028^***	0.005	0.002	0.005	0.005
MB_i,t	(5.31)	(2.95)	(1.26)	(0.26)	(0.98)	(0.41)
Growth_i,t	0.003	0.021	−0.004	0.026^*	−0.023^**	0.017
Growth_i,t	(0.70)	(1.50)	(−0.48)	(1.70)	(−2.20)	(0.73)
RDint_i,t	0.524^***	0.374	0.607^***	0.295	0.607^***	0.213
RDint_i,t	(6.40)	(1.22)	(5.76)	(0.62)	(3.71)	(0.38)
Constant	−0.098^***	−0.198	0.009	0.778^**	−0.065	0.658
Constant	(−2.71)	(−0.85)	(0.16)	(2.28)	(−0.89)	(1.41)
Fixed Effects
Industry	YES	YES	YES	YES	YES	YES
Year	YES	YES	YES	YES	YES	YES
# of Obs.	1,754	1,617	1,350	1,216	995	919
Adj. R²	0.378	0.530	0.290	0.351	0.199	0.274

Panel A: The heterogeneous effect of earnings pressure on OTC1 and ROA
	(1)	(2)	(3)	(4)	(5)	(6)
	MBE_i,t = 1	MBE_i,t = 0	MBE_i,t = 1	MBE_i,t = 0	MBE_i,t = 1	MBE_i,t = 0
	ROA_i,t+1	ROA_i,t+1	ROA_i,t+2	ROA_i,t+2	ROA_i,t+3	ROA_i,t+3
OTC1_i,t	−0.008^***	0.002	−0.008^**	−0.003	−0.011^**	−0.010
OTC1_i,t	(−2.94)	(0.28)	(−2.10)	(−0.38)	(−2.41)	(−1.06)
ROA_i,t	0.395^***	0.032	0.464^***	−0.185	0.374^***	−0.082
ROA_i,t	(9.83)	(0.25)	(9.12)	(−1.33)	(5.09)	(−0.50)
Size_i,t	0.006^***	0.011	0.003	−0.032^**	0.003	−0.030
Size_i,t	(4.51)	(1.03)	(1.53)	(−2.07)	(0.96)	(−1.40)
Lev_i,t	−0.034^***	−0.039	−0.016	−0.020	−0.025^*	0.053
Lev_i,t	(−4.73)	(−0.99)	(−1.38)	(−0.46)	(−1.69)	(0.90)
MB_i,t	0.015^***	0.028^***	0.005	0.002	0.005	0.005
MB_i,t	(5.31)	(2.95)	(1.26)	(0.26)	(0.98)	(0.41)
Growth_i,t	0.003	0.021	−0.004	0.026^*	−0.023^**	0.017
Growth_i,t	(0.70)	(1.50)	(−0.48)	(1.70)	(−2.20)	(0.73)
RDint_i,t	0.524^***	0.374	0.607^***	0.295	0.607^***	0.213
RDint_i,t	(6.40)	(1.22)	(5.76)	(0.62)	(3.71)	(0.38)
Constant	−0.098^***	−0.198	0.009	0.778^**	−0.065	0.658
Constant	(−2.71)	(−0.85)	(0.16)	(2.28)	(−0.89)	(1.41)
Fixed Effects
Industry	YES	YES	YES	YES	YES	YES
Year	YES	YES	YES	YES	YES	YES
# of Obs.	1,754	1,617	1,350	1,216	995	919
Adj. R²	0.378	0.530	0.290	0.351	0.199	0.274

Panel B: The heterogeneous effect of earnings pressure on OTC1 and ROE
	(1)	(2)	(3)	(4)	(5)	(6)
	MBE_i,t = 1	MBE_i,t = 0	MBE_i,t = 1	MBE_i,t = 0	MBE_i,t = 1	MBE_i,t = 0
	ROE_i,t+1	ROE_i,t+1	ROE_i,t+2	ROE_i,t+2	ROE_i,t+3	ROE_i,t+3
OTC1_i,t	−0.013^**	0.005	−0.012^*	−0.008	−0.017^**	−0.021
OTC1_i,t	(−2.58)	(0.48)	(−1.91)	(−0.64)	(−2.17)	(−1.08)
ROE_i,t	0.362^***	−0.039	0.392^***	−0.361^***	0.371^***	−0.177
ROE_i,t	(9.08)	(−0.30)	(8.35)	(−2.70)	(6.29)	(−1.10)
Size_i,t	0.014^***	0.019	0.009^**	−0.050^*	0.006	−0.065
Size_i,t	(4.69)	(1.00)	(2.30)	(−1.67)	(1.33)	(−1.46)
Lev_i,t	0.012	0.037	0.043^**	0.018	0.037	0.127
Lev_i,t	(0.86)	(0.53)	(2.37)	(0.26)	(1.45)	(1.22)
MB_i,t	0.030^***	0.055^***	0.014^*	0.012	0.010	0.016
MB_i,t	(5.47)	(3.03)	(1.79)	(0.67)	(1.05)	(0.68)
Growth_i,t	0.010	0.030	0.013	0.045	−0.031^*	0.014
Growth_i,t	(1.09)	(1.16)	(1.04)	(1.62)	(−1.71)	(0.31)
RDint_i,t	0.989^***	0.765	1.297^***	0.513	1.074^***	0.764
RDint_i,t	(6.38)	(1.44)	(7.09)	(0.89)	(3.72)	(0.75)
Constant	−0.274^***	−0.411	−0.108	1.239^*	−0.201	1.416
Constant	(−3.93)	(−0.93)	(−1.19)	(1.83)	(−1.39)	(1.46)
Fixed Effects
Industry	YES	YES	YES	YES	YES	YES
Year	YES	YES	YES	YES	YES	YES
# of Obs.	1,754	1,617	1,342	1,211	988	919
Adj. R²	0.305	0.451	0.264	0.270	0.193	0.211

Panel B: The heterogeneous effect of earnings pressure on OTC1 and ROE
	(1)	(2)	(3)	(4)	(5)	(6)
	MBE_i,t = 1	MBE_i,t = 0	MBE_i,t = 1	MBE_i,t = 0	MBE_i,t = 1	MBE_i,t = 0
	ROE_i,t+1	ROE_i,t+1	ROE_i,t+2	ROE_i,t+2	ROE_i,t+3	ROE_i,t+3
OTC1_i,t	−0.013^**	0.005	−0.012^*	−0.008	−0.017^**	−0.021
OTC1_i,t	(−2.58)	(0.48)	(−1.91)	(−0.64)	(−2.17)	(−1.08)
ROE_i,t	0.362^***	−0.039	0.392^***	−0.361^***	0.371^***	−0.177
ROE_i,t	(9.08)	(−0.30)	(8.35)	(−2.70)	(6.29)	(−1.10)
Size_i,t	0.014^***	0.019	0.009^**	−0.050^*	0.006	−0.065
Size_i,t	(4.69)	(1.00)	(2.30)	(−1.67)	(1.33)	(−1.46)
Lev_i,t	0.012	0.037	0.043^**	0.018	0.037	0.127
Lev_i,t	(0.86)	(0.53)	(2.37)	(0.26)	(1.45)	(1.22)
MB_i,t	0.030^***	0.055^***	0.014^*	0.012	0.010	0.016
MB_i,t	(5.47)	(3.03)	(1.79)	(0.67)	(1.05)	(0.68)
Growth_i,t	0.010	0.030	0.013	0.045	−0.031^*	0.014
Growth_i,t	(1.09)	(1.16)	(1.04)	(1.62)	(−1.71)	(0.31)
RDint_i,t	0.989^***	0.765	1.297^***	0.513	1.074^***	0.764
RDint_i,t	(6.38)	(1.44)	(7.09)	(0.89)	(3.72)	(0.75)
Constant	−0.274^***	−0.411	−0.108	1.239^*	−0.201	1.416
Constant	(−3.93)	(−0.93)	(−1.19)	(1.83)	(−1.39)	(1.46)
Fixed Effects
Industry	YES	YES	YES	YES	YES	YES
Year	YES	YES	YES	YES	YES	YES
# of Obs.	1,754	1,617	1,342	1,211	988	919
Adj. R²	0.305	0.451	0.264	0.270	0.193	0.211

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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