Table 5 Characteristics of RMC members...

Table 5

Characteristics of RMC members and corporate litigation (test of H2)

	(1)	(2)	(3)
Variables	Poisson LAWSUIT	FFE model (Poisson) LAWSUIT	OLS SUIT_COST
Panel A: Characteristics of RMC and corporate litigation using full control variables
RMCSIZE	−0.203***	−0.186***	−0.123*
RMCSIZE	[−9.66]	[−5.50]	[−1.88]
RMCIND	−0.553***	−0.705**	−1.292*
RMCIND	[−2.73]	[−1.96]	[−1.72]
RMC_HC	0.074	−0.055	1.650***
RMC_HC	[0.43]	[−0.18]	[2.66]
RMC_LEGEX	−1.585***	−1.215***	0.420
RMC_LEGEX	[−7.95]	[−3.80]	[0.64]
AC	12.358	11.822	−6.600*
AC	[0.02]	[0.02]	[−1.82]
BSIZE	0.017	−0.040	0.120
BSIZE	[0.39]	[−0.54]	[0.93]
BIND	−5.166***	−5.930***	0.571
BIND	[−3.87]	[−2.63]	[0.13]
DUAL	−0.389	−0.152	1.043
DUAL	[−1.52]	[−0.40]	[1.15]
BTM	−0.560	−0.392	−1.835
BTM	[−1.51]	[−0.60]	[−1.35]
ROA	−0.792	−1.191	−5.847
ROA	[−0.85]	[−0.79]	[−1.27]
SIZE	−0.697***	−0.613***	0.879***
SIZE	[−8.89]	[−4.61]	[3.59]
LOSS	0.120	0.084	−0.806
LOSS	[0.53]	[0.22]	[−0.80]
DEBT	3.216***	2.568***	2.427**
DEBT	[10.57]	[5.17]	[1.99]
FCS	−0.623***	−0.255	0.391
FCS	[−3.96]	[−0.97]	[0.73]
BIG4	0.071	0.332	−1.329
BIG4	[0.21]	[0.54]	[−1.54]
SOE	0.418**	0.234	−0.402
SOE	[2.12]	[0.76]	[−0.68]
LNALPHA	–	0.534***	–
LNALPHA	–	[7.34]	–
Constant	4.265	2.990	−11.862**
Constant	[0.01]	[0.00]	[−2.00]
Year and Industry FE	Yes	Yes	Yes
Observations	730	730	730
Pseudo R2	0.37		0.27

	(1)	(2)	(3)
Variables	Poisson LAWSUIT	FFE model (Poisson) LAWSUIT	OLSSUIT_COST
Panel A: Characteristics of RMC and corporate litigation using full control variables
RMCSIZE	−0.203***	−0.186***	−0.123*
RMCSIZE	[−9.66]	[−5.50]	[−1.88]
RMCIND	−0.553***	−0.705**	−1.292*
RMCIND	[−2.73]	[−1.96]	[−1.72]
RMC_HC	0.074	−0.055	1.650***
RMC_HC	[0.43]	[−0.18]	[2.66]
RMC_LEGEX	−1.585***	−1.215***	0.420
RMC_LEGEX	[−7.95]	[−3.80]	[0.64]
AC	12.358	11.822	−6.600*
AC	[0.02]	[0.02]	[−1.82]
BSIZE	0.017	−0.040	0.120
BSIZE	[0.39]	[−0.54]	[0.93]
BIND	−5.166***	−5.930***	0.571
BIND	[−3.87]	[−2.63]	[0.13]
DUAL	−0.389	−0.152	1.043
DUAL	[−1.52]	[−0.40]	[1.15]
BTM	−0.560	−0.392	−1.835
BTM	[−1.51]	[−0.60]	[−1.35]
ROA	−0.792	−1.191	−5.847
ROA	[−0.85]	[−0.79]	[−1.27]
SIZE	−0.697***	−0.613***	0.879***
SIZE	[−8.89]	[−4.61]	[3.59]
LOSS	0.120	0.084	−0.806
LOSS	[0.53]	[0.22]	[−0.80]
DEBT	3.216***	2.568***	2.427**
DEBT	[10.57]	[5.17]	[1.99]
FCS	−0.623***	−0.255	0.391
FCS	[−3.96]	[−0.97]	[0.73]
BIG4	0.071	0.332	−1.329
BIG4	[0.21]	[0.54]	[−1.54]
SOE	0.418**	0.234	−0.402
SOE	[2.12]	[0.76]	[−0.68]
LNALPHA	–	0.534***	–
LNALPHA	–	[7.34]	–
Constant	4.265	2.990	−11.862**
Constant	[0.01]	[0.00]	[−2.00]
Year and Industry FE	Yes	Yes	Yes
Observations	730	730	730
Pseudo R2	0.37		0.27

	(1)	(2)	(3)
Variables	Poisson LAWSUIT	Poisson LAWSUIT	Poisson LAWSUIT
Panel B: Characteristics of RMC and corporate litigation using a parsimonious specification with fewer controls
RMCSIZE	−0.110***	−0.188***	−0.124***
RMCSIZE	[−6.59]	[−9.20]	[−7.33]
RMCIND	−1.199***	−0.607***	−1.205***
RMCIND	[−6.28]	[−3.02]	[−6.22]
RMC_HC	−0.412***	0.101	−0.186
RMC_HC	[−2.82]	[0.61]	[−1.22]
RMC_LEGEX	−0.916***	−1.573***	−1.120***
RMC_LEGEX	[−5.56]	[−7.93]	[−6.83]
AC	–	–	13.178
AC	–	–	[0.02]
BSIZE	–	–	−0.128***
BSIZE	–	–	[−3.69]
BIND	–	–	−4.950***
BIND	–	–	[−4.31]
DUAL	–	–	−0.159
DUAL	–	–	[−0.67]
BTM	–	−0.434	–
BTM	–	[−1.20]	–
ROA	–	−0.650	–
ROA	–	[−0.74]	–
SIZE	–	−0.677***	–
SIZE	–	[−9.42]	–
LOSS	–	0.059	–
LOSS	–	[0.26]	–
DEBT	–	3.144***	–
DEBT	–	[10.59]	–
FCS	–	−0.603***	–
FCS	–	[−3.82]	–
BIG4	–	−0.010	–
BIG4	–	[−0.03]	–
SOE	–	0.391**	–
SOE	–	[2.07]	–
Constant	0.725***	14.292***	−8.920
Constant	[2.94]	[9.97]	[−0.01]
Year and Industry FE	Yes	Yes	Yes
Observations	730	730	730
Pseudo R2	0.36	0.19	0.21

	(1)	(2)	(3)
Variables	Poisson LAWSUIT	Poisson LAWSUIT	Poisson LAWSUIT
Panel B: Characteristics of RMC and corporate litigation using a parsimonious specification with fewer controls
RMCSIZE	−0.110***	−0.188***	−0.124***
RMCSIZE	[−6.59]	[−9.20]	[−7.33]
RMCIND	−1.199***	−0.607***	−1.205***
RMCIND	[−6.28]	[−3.02]	[−6.22]
RMC_HC	−0.412***	0.101	−0.186
RMC_HC	[−2.82]	[0.61]	[−1.22]
RMC_LEGEX	−0.916***	−1.573***	−1.120***
RMC_LEGEX	[−5.56]	[−7.93]	[−6.83]
AC	–	–	13.178
AC	–	–	[0.02]
BSIZE	–	–	−0.128***
BSIZE	–	–	[−3.69]
BIND	–	–	−4.950***
BIND	–	–	[−4.31]
DUAL	–	–	−0.159
DUAL	–	–	[−0.67]
BTM	–	−0.434	–
BTM	–	[−1.20]	–
ROA	–	−0.650	–
ROA	–	[−0.74]	–
SIZE	–	−0.677***	–
SIZE	–	[−9.42]	–
LOSS	–	0.059	–
LOSS	–	[0.26]	–
DEBT	–	3.144***	–
DEBT	–	[10.59]	–
FCS	–	−0.603***	–
FCS	–	[−3.82]	–
BIG4	–	−0.010	–
BIG4	–	[−0.03]	–
SOE	–	0.391**	–
SOE	–	[2.07]	–
Constant	0.725***	14.292***	−8.920
Constant	[2.94]	[9.97]	[−0.01]
Year and Industry FE	Yes	Yes	Yes
Observations	730	730	730
Pseudo R2	0.36	0.19	0.21

Note(s): This table reports the regression results of the relationship between the characteristics of RMC members and corporate litigation. Panel A reports the regression with a full set of control variables, whereas Panel B reports a parsimonious specification. Robust t-statistics (clustered at the firm level) are reported in brackets. Continuous variables are winsorized at the 1st and 99th percentiles. *, **, *** denote a two-tailed p-value of less than 0.10, 0.05 and 0.01, respectively. All variables are defined in Appendix

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