Table 10 Results of the PSM analysis...

Table 10

Results of the PSM analysis

Variables	Treated	Controls	Difference	S.E.	t-stat
Panel A: Covariate matching process
AC	0.996	0.995	0.000	0.003	0.160
BSIZE	9.545	9.405	0.140	0.095	1.480
BIND	0.376	0.376	−0.000	0.002	−0.200
DUAL	0.075	0.076	−0.000	0.013	−0.040
BTM	0.706	0.702	0.004	0.012	0.320
ROA	0.027	0.027	0.000	0.003	0.010
SIZE	23.370	23.287	0.083	0.085	0.970
LOSS	0.116	0.124	−0.007	0.013	−0.550
DEBT	0.611	0.605	0.006	0.010	0.670
FCS	0.462	0.473	−0.011	0.021	−0.540
BIG4	0.125	0.099	0.025	0.013	2.000
SOE	0.703	0.706	−0.004	0.019	−0.190

Variables	Treated	Controls	Difference	S.E.	t-stat
Panel A: Covariate matching process
AC	0.996	0.995	0.000	0.003	0.160
BSIZE	9.545	9.405	0.140	0.095	1.480
BIND	0.376	0.376	−0.000	0.002	−0.200
DUAL	0.075	0.076	−0.000	0.013	−0.040
BTM	0.706	0.702	0.004	0.012	0.320
ROA	0.027	0.027	0.000	0.003	0.010
SIZE	23.370	23.287	0.083	0.085	0.970
LOSS	0.116	0.124	−0.007	0.013	−0.550
DEBT	0.611	0.605	0.006	0.010	0.670
FCS	0.462	0.473	−0.011	0.021	−0.540
BIG4	0.125	0.099	0.025	0.013	2.000
SOE	0.703	0.706	−0.004	0.019	−0.190

Variables	Bias before	Bias after	Bias reduction	t-test after	P-value after
Panel B: Covariate balance diagnostics before and after matching
AC	4.20	−3.60	13.80	−1.00	0.317
BSIZE	47.10	6.00	87.20	1.00	0.319
BIND	1.20	1.60	−30.60	0.29	0.770
DUAL	−14.9	−0.70	95.10	−0.17	0.864
BTM	38.50	4.70	87.90	0.86	0.389
ROA	28.50	2.20	92.10	0.43	0.668
SIZE	64.50	7.00	89.20	1.19	0.232
LOSS	7.50	−0.90	88.10	−0.16	0.871
DEBT	77.80	3.00	96.20	0.58	0.560
FCS	−10.50	−7.70	26.80	−1.47	0.142
BIG4	38.30	11.10	71.00	1.76	0.079
SOE	83.60	−2.40	97.20	−0.46	0.645

Variables	Bias before	Bias after	Bias reduction	t-test after	P-value after
Panel B: Covariate balance diagnostics before and after matching
AC	4.20	−3.60	13.80	−1.00	0.317
BSIZE	47.10	6.00	87.20	1.00	0.319
BIND	1.20	1.60	−30.60	0.29	0.770
DUAL	−14.9	−0.70	95.10	−0.17	0.864
BTM	38.50	4.70	87.90	0.86	0.389
ROA	28.50	2.20	92.10	0.43	0.668
SIZE	64.50	7.00	89.20	1.19	0.232
LOSS	7.50	−0.90	88.10	−0.16	0.871
DEBT	77.80	3.00	96.20	0.58	0.560
FCS	−10.50	−7.70	26.80	−1.47	0.142
BIG4	38.30	11.10	71.00	1.76	0.079
SOE	83.60	−2.40	97.20	−0.46	0.645

Statistic	Unmatched	Matched
Pseudo (Rˆ2)	0.122	0.004
LR chi-square	776.50	7.09
p-value	0.000	0.851
Mean Bias	34.70	4.20
Median Bias	33.40	3.30
Rubin's B	103.70	13.90
Rubin's R	1.54	1.31

	(1)
Variables	Poisson LAWSUIT
Panel B: PSM Regression results
RMC	−0.282***
RMC	[−3.33]
Other control variables	Yes
Constant	−11.017*
Constant	[−1.92]
Year and Industry	Yes
Observations	1,396
Pseudo R2	0.21

	(1)
Panel B: PSM Regression results
RMC	−0.282***
[−3.33]
Other control variables	Yes
Constant	−11.017*
[−1.92]
Year and Industry	Yes
Observations	1,396
Pseudo R2	0.21

Note(s): This table reports PSM results. Panel A shows the results of the matching process. Panel B illustrates the relationship between a standalone RMC and corporate litigation. Continuous variables are winsorized at the 1st and 99th percentiles. ***, and ** denote a two-tailed p-value of less than 0.01 and 0.05, respectively. Robust t-statistics (clustered at the firm level) are reported in parentheses. All variables are defined in appendix

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