Table 5 Relationship between... | Emerald Publishing

Table 5

Relationship between profitability and financial flexibility

Dependent variable	ROA			ROE
Model	1	2	3	4	5	6
Panel model type	Fixed	Fixed	Fixed	Fixed	Fixed	Fixed
Const	−0.5329*** (0.0089)	−0.5377*** (0.0089)	−0.6115*** (0.0101)	−0.9521*** (0.0331)	−0.9056*** (0.0329)	−1.0715*** (0.0344)
FF	0.2626** (0.0024)*	0.2597** (0.0024)*		0.3849** (0.0122)*	0.4149** (0.0131)*
FF²		0.0645** (0.0052)*			−0.6490** (0.0399)*
FF1			0.0596** (0.0008)*			0.0596** (0.0026)*
SIZE	0.0704*** (0.0010)	0.0704*** (0.0010)	0.0765*** (0.0012)	0.1252*** (0.0038)	0.1248*** (0.0038)	0.1365*** (0.0040)
GDP_GROW	0.0419*** (0.0034)	0.0416*** (0.0034)	0.0227*** (0.0041)	0.0917*** (0.0159)	0.0935*** (0.0156)	0.0573*** (0.0163)
No. of obs	112 344	112 344	112 344	112 866	112 866	112 866
Joint test on named regressors (F test)	5834.91 p < 0.001	4 521.45 p < 0.001	3 427.67 p < 0.001	699.31 p < 0.001	577.99 p < 0.001	573.43 p < 0.001
Breusch-Pagan test	128876.40 p < 0.001	127043.30 p < 0.001	112154.70 p < 0.001	23880.67 p < 0.001	24642.38 p < 0.001	23139.69 p < 0.001
Hausman test	3960.48 p < 0.001	4361.94 p < 0.001	2454.28 p < 0.001	1083.39 p < 0.001	1162.99 p < 0.001	751.93 p < 0.001
SBC	−223323.31	−223984.21	−190342.37	−166251.79	−164037.76	−169551.34
AIC	−366203.17	−366873.70	−333222.23	−23235.71	−21021.04	−26535.25
HQC	−323068.23	−323735.85	−290087.29	−66402.83	−64182.08	−69702.38

Dependent variable	ROA			ROE
Model	1	2	3	4	5	6
Panel model type	Fixed	Fixed	Fixed	Fixed	Fixed	Fixed
Const	−0.5329*** (0.0089)	−0.5377*** (0.0089)	−0.6115*** (0.0101)	−0.9521*** (0.0331)	−0.9056*** (0.0329)	−1.0715*** (0.0344)
FF	0.2626*** (0.0024)	0.2597*** (0.0024)		0.3849*** (0.0122)	0.4149*** (0.0131)
FF²		0.0645*** (0.0052)			−0.6490*** (0.0399)
FF1			0.0596*** (0.0008)			0.0596*** (0.0026)
SIZE	0.0704*** (0.0010)	0.0704*** (0.0010)	0.0765*** (0.0012)	0.1252*** (0.0038)	0.1248*** (0.0038)	0.1365*** (0.0040)
GDP_GROW	0.0419*** (0.0034)	0.0416*** (0.0034)	0.0227*** (0.0041)	0.0917*** (0.0159)	0.0935*** (0.0156)	0.0573*** (0.0163)
No. of obs	112 344	112 344	112 344	112 866	112 866	112 866
Joint test on named regressors (F test)	5834.91 p < 0.001	4 521.45 p < 0.001	3 427.67 p < 0.001	699.31 p < 0.001	577.99 p < 0.001	573.43 p < 0.001
Breusch-Pagan test	128876.40 p < 0.001	127043.30 p < 0.001	112154.70 p < 0.001	23880.67 p < 0.001	24642.38 p < 0.001	23139.69 p < 0.001
Hausman test	3960.48 p < 0.001	4361.94 p < 0.001	2454.28 p < 0.001	1083.39 p < 0.001	1162.99 p < 0.001	751.93 p < 0.001
SBC	−223323.31	−223984.21	−190342.37	−166251.79	−164037.76	−169551.34
AIC	−366203.17	−366873.70	−333222.23	−23235.71	−21021.04	−26535.25
HQC	−323068.23	−323735.85	−290087.29	−66402.83	−64182.08	−69702.38

Note(s): * dependence is significant at the level of 0.1

** dependence is significant at the level of 0.05

*** dependence is significant at the level of 0.01

(standard errors in parentheses)

Source(s): Own elaboration

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