Table 11 Audit committee centrality and...

Table 11

Audit committee centrality and audit opinion in probit model by leverage

Split by	Low LEV	High LEV	Low LEV	High LEV	Low LEV	High LEV	Low LEV	High LEV	Low LEV	High LEV	Low LEV	High LEV
	DEG	DEG	EIGEN	EIGEN	BET	BET	CLOS	CLOS	PCA	PCA	N-SCORE	N-SCORE
CENTRALITY	0.356**	0.120	0.581**	0.167*	0.257**	−0.119	0.0412	−0.0457	0.247**	0.0403	0.535**	0.0536
CENTRALITY	(0.179)	(0.0986)	(0.261)	(0.0907)	(0.110)	(0.0797)	(0.0703)	(0.0549)	(0.108)	(0.0519)	(0.213)	(0.0918)
SIZE	−0.102	−0.399***	−0.0742	−0.398***	−0.0155	−0.372***	−0.0438	−0.356***	−0.0776	−0.382***	−0.0458	−0.372***
SIZE	(0.0957)	(0.111)	(0.0874)	(0.114)	(0.0900)	(0.114)	(0.0897)	(0.113)	(0.0915)	(0.112)	(0.0877)	(0.114)
LEV	0.252	−0.488	0.0972	−0.509	0.303	−0.416	0.0503	−0.385	0.209	−0.521	0.0603	−0.522
LEV	(0.892)	(0.922)	(0.857)	(0.919)	(0.921)	(0.934)	(0.863)	(0.933)	(0.897)	(0.917)	(0.888)	(0.918)
ROA	−3.074*	0.454	−3.179**	0.538	−2.879*	0.727	−3.048*	0.548	−3.107*	0.322	−3.064*	0.384
ROA	(1.609)	(1.829)	(1.566)	(1.818)	(1.641)	(1.798)	(1.579)	(1.794)	(1.624)	(1.814)	(1.617)	(1.812)
EXP	0.683	−0.0228	0.579	−0.120	0.542	0.0339	0.561	0.0109	0.628	−0.0200	0.530	−0.0113
EXP	(0.449)	(0.385)	(0.416)	(0.391)	(0.413)	(0.405)	(0.426)	(0.388)	(0.441)	(0.386)	(0.390)	(0.381)
RECEI	−0.350	−2.216***	−0.146	−2.188***	0.476	−2.296***	0.392	−2.231***	−0.0774	−2.238***	0.166	−2.242***
RECEI	(1.077)	(0.784)	(1.047)	(0.781)	(1.085)	(0.788)	(1.053)	(0.795)	(1.031)	(0.793)	(1.029)	(0.795)
LOSS	−0.594*	0.0702	−0.601*	0.0391	−0.577*	0.0708	−0.588*	0.0693	−0.587*	0.0574	−0.587*	0.0630
LOSS	(0.311)	(0.207)	(0.319)	(0.211)	(0.309)	(0.207)	(0.302)	(0.205)	(0.311)	(0.207)	(0.321)	(0.206)
LOSS_t−1	1.804***	1.581***	1.762***	1.555***	1.789***	1.614***	1.810***	1.590***	1.809***	1.587***	1.777***	1.588***
LOSS_t−1	(0.199)	(0.159)	(0.200)	(0.161)	(0.202)	(0.161)	(0.203)	(0.159)	(0.201)	(0.160)	(0.201)	(0.159)
AC_SIZE	−0.0523	0.00466	−0.0455	0.00488	−0.0208	−0.00820	−0.0402	0.0109	−0.0356	0.0148	−0.0145	0.0155
AC_SIZE	(0.0549)	(0.0422)	(0.0569)	(0.0412)	(0.0547)	(0.0434)	(0.0568)	(0.0413)	(0.0546)	(0.0414)	(0.0553)	(0.0422)
AC_MEET	0.0114	−0.0121	0.0107	−0.0128	0.0136	−0.0120	0.0151	−0.0117	0.00982	−0.0101	0.0146	−0.0110
AC_MEET	(0.0448)	(0.0344)	(0.0458)	(0.0339)	(0.0442)	(0.0333)	(0.0448)	(0.0332)	(0.0447)	(0.0336)	(0.0449)	(0.0336)
B_MEET	−0.0569*	0.0140	−0.0559*	0.0139	−0.0599*	0.0168	−0.0706**	0.0139	−0.0521*	0.0131	−0.0520	0.0131
B_MEET	(0.0313)	(0.0256)	(0.0328)	(0.0259)	(0.0312)	(0.0249)	(0.0321)	(0.0252)	(0.0308)	(0.0254)	(0.0322)	(0.0253)
B_INDEP	1.492***	1.073***	1.233***	0.967**	1.047***	1.078***	1.085***	1.068***	1.256***	1.073***	1.218***	1.082***
B_INDEP	(0.422)	(0.379)	(0.345)	(0.391)	(0.340)	(0.381)	(0.349)	(0.380)	(0.358)	(0.378)	(0.347)	(0.379)
BIG4	−4.181***	1.447***	−4.105***	1.395***	−4.162***	1.452***	−4.061***	1.397***	−4.125***	1.437***	−4.197***	1.422***
BIG4	(0.260)	(0.296)	(0.236)	(0.293)	(0.319)	(0.307)	(0.241)	(0.301)	(0.269)	(0.299)	(0.299)	(0.297)
AF_t−1	−0.0958	0.0383	−0.104	0.0488	−0.0947	0.0464	−0.0895	0.0427	−0.0947	0.0387	−0.0879	0.0420
AF_t−1	(0.0827)	(0.0971)	(0.0812)	(0.0950)	(0.0835)	(0.0957)	(0.0813)	(0.0952)	(0.0830)	(0.0959)	(0.0842)	(0.0957)
RLAW	0.307	−0.0550	0.265	−0.0963	0.297	−0.0446	0.277	−0.0203	0.309*	−0.0418	0.322*	−0.0397
RLAW	(0.189)	(0.184)	(0.183)	(0.193)	(0.184)	(0.192)	(0.184)	(0.188)	(0.186)	(0.187)	(0.187)	(0.188)
REST_LINKS	−0.0648	0.0231	−0.0773	0.0228	−0.0652	0.0261	−0.0627	0.0255	−0.0672	0.0284	−0.0715	0.0286
REST_LINKS	(0.0689)	(0.0511)	(0.0679)	(0.0515)	(0.0688)	(0.0497)	(0.0665)	(0.0506)	(0.0697)	(0.0511)	(0.0708)	(0.0510)
LINKS_TOTAL	−0.0336	−0.0731	0.0217	−0.0634	−0.0416	−0.0294	0.0107	−0.0473	−0.0557	−0.0712	−0.0350	−0.0651
LINKS_TOTAL	(0.0803)	(0.0495)	(0.0624)	(0.0458)	(0.0756)	(0.0497)	(0.0631)	(0.0478)	(0.0815)	(0.0503)	(0.0705)	(0.0475)
Intercept	5.564***	2.626	5.699***	2.638*	4.745***	2.075	5.001***	1.829	5.441***	2.373	5.168***	2.195
Intercept	(1.008)	(1.606)	(1.048)	(1.602)	(1.052)	(1.582)	(0.952)	(1.584)	(1.032)	(1.589)	(1.042)	(1.573)
Observations	826	891	826	891	826	891	826	891	826	891	826	891
Wald χ²	1883.34	456.45		489.80		449.96	2204.97	432.57	1595.96	445.29		443.63
Pseudo R²	0.5453	0.4784	0.5436	0.4819	0.5446	0.4788	0.5372	0.4776	0.5469	0.4775	0.5490	0.4774

Split by	Low LEV	High LEV	Low LEV	High LEV	Low LEV	High LEV	Low LEV	High LEV	Low LEV	High LEV	Low LEV	High LEV
	DEG	DEG	EIGEN	EIGEN	BET	BET	CLOS	CLOS	PCA	PCA	N-SCORE	N-SCORE
CENTRALITY	0.356**	0.120	0.581**	0.167*	0.257**	−0.119	0.0412	−0.0457	0.247**	0.0403	0.535**	0.0536
CENTRALITY	(0.179)	(0.0986)	(0.261)	(0.0907)	(0.110)	(0.0797)	(0.0703)	(0.0549)	(0.108)	(0.0519)	(0.213)	(0.0918)
SIZE	−0.102	−0.399***	−0.0742	−0.398***	−0.0155	−0.372***	−0.0438	−0.356***	−0.0776	−0.382***	−0.0458	−0.372***
SIZE	(0.0957)	(0.111)	(0.0874)	(0.114)	(0.0900)	(0.114)	(0.0897)	(0.113)	(0.0915)	(0.112)	(0.0877)	(0.114)
LEV	0.252	−0.488	0.0972	−0.509	0.303	−0.416	0.0503	−0.385	0.209	−0.521	0.0603	−0.522
LEV	(0.892)	(0.922)	(0.857)	(0.919)	(0.921)	(0.934)	(0.863)	(0.933)	(0.897)	(0.917)	(0.888)	(0.918)
ROA	−3.074*	0.454	−3.179**	0.538	−2.879*	0.727	−3.048*	0.548	−3.107*	0.322	−3.064*	0.384
ROA	(1.609)	(1.829)	(1.566)	(1.818)	(1.641)	(1.798)	(1.579)	(1.794)	(1.624)	(1.814)	(1.617)	(1.812)
EXP	0.683	−0.0228	0.579	−0.120	0.542	0.0339	0.561	0.0109	0.628	−0.0200	0.530	−0.0113
EXP	(0.449)	(0.385)	(0.416)	(0.391)	(0.413)	(0.405)	(0.426)	(0.388)	(0.441)	(0.386)	(0.390)	(0.381)
RECEI	−0.350	−2.216***	−0.146	−2.188***	0.476	−2.296***	0.392	−2.231***	−0.0774	−2.238***	0.166	−2.242***
RECEI	(1.077)	(0.784)	(1.047)	(0.781)	(1.085)	(0.788)	(1.053)	(0.795)	(1.031)	(0.793)	(1.029)	(0.795)
LOSS	−0.594*	0.0702	−0.601*	0.0391	−0.577*	0.0708	−0.588*	0.0693	−0.587*	0.0574	−0.587*	0.0630
LOSS	(0.311)	(0.207)	(0.319)	(0.211)	(0.309)	(0.207)	(0.302)	(0.205)	(0.311)	(0.207)	(0.321)	(0.206)
LOSS_t−1	1.804***	1.581***	1.762***	1.555***	1.789***	1.614***	1.810***	1.590***	1.809***	1.587***	1.777***	1.588***
LOSS_t−1	(0.199)	(0.159)	(0.200)	(0.161)	(0.202)	(0.161)	(0.203)	(0.159)	(0.201)	(0.160)	(0.201)	(0.159)
AC_SIZE	−0.0523	0.00466	−0.0455	0.00488	−0.0208	−0.00820	−0.0402	0.0109	−0.0356	0.0148	−0.0145	0.0155
AC_SIZE	(0.0549)	(0.0422)	(0.0569)	(0.0412)	(0.0547)	(0.0434)	(0.0568)	(0.0413)	(0.0546)	(0.0414)	(0.0553)	(0.0422)
AC_MEET	0.0114	−0.0121	0.0107	−0.0128	0.0136	−0.0120	0.0151	−0.0117	0.00982	−0.0101	0.0146	−0.0110
AC_MEET	(0.0448)	(0.0344)	(0.0458)	(0.0339)	(0.0442)	(0.0333)	(0.0448)	(0.0332)	(0.0447)	(0.0336)	(0.0449)	(0.0336)
B_MEET	−0.0569*	0.0140	−0.0559*	0.0139	−0.0599*	0.0168	−0.0706**	0.0139	−0.0521*	0.0131	−0.0520	0.0131
B_MEET	(0.0313)	(0.0256)	(0.0328)	(0.0259)	(0.0312)	(0.0249)	(0.0321)	(0.0252)	(0.0308)	(0.0254)	(0.0322)	(0.0253)
B_INDEP	1.492***	1.073***	1.233***	0.967**	1.047***	1.078***	1.085***	1.068***	1.256***	1.073***	1.218***	1.082***
B_INDEP	(0.422)	(0.379)	(0.345)	(0.391)	(0.340)	(0.381)	(0.349)	(0.380)	(0.358)	(0.378)	(0.347)	(0.379)
BIG4	−4.181***	1.447***	−4.105***	1.395***	−4.162***	1.452***	−4.061***	1.397***	−4.125***	1.437***	−4.197***	1.422***
BIG4	(0.260)	(0.296)	(0.236)	(0.293)	(0.319)	(0.307)	(0.241)	(0.301)	(0.269)	(0.299)	(0.299)	(0.297)
AF_t−1	−0.0958	0.0383	−0.104	0.0488	−0.0947	0.0464	−0.0895	0.0427	−0.0947	0.0387	−0.0879	0.0420
AF_t−1	(0.0827)	(0.0971)	(0.0812)	(0.0950)	(0.0835)	(0.0957)	(0.0813)	(0.0952)	(0.0830)	(0.0959)	(0.0842)	(0.0957)
RLAW	0.307	−0.0550	0.265	−0.0963	0.297	−0.0446	0.277	−0.0203	0.309*	−0.0418	0.322*	−0.0397
RLAW	(0.189)	(0.184)	(0.183)	(0.193)	(0.184)	(0.192)	(0.184)	(0.188)	(0.186)	(0.187)	(0.187)	(0.188)
REST_LINKS	−0.0648	0.0231	−0.0773	0.0228	−0.0652	0.0261	−0.0627	0.0255	−0.0672	0.0284	−0.0715	0.0286
REST_LINKS	(0.0689)	(0.0511)	(0.0679)	(0.0515)	(0.0688)	(0.0497)	(0.0665)	(0.0506)	(0.0697)	(0.0511)	(0.0708)	(0.0510)
LINKS_TOTAL	−0.0336	−0.0731	0.0217	−0.0634	−0.0416	−0.0294	0.0107	−0.0473	−0.0557	−0.0712	−0.0350	−0.0651
LINKS_TOTAL	(0.0803)	(0.0495)	(0.0624)	(0.0458)	(0.0756)	(0.0497)	(0.0631)	(0.0478)	(0.0815)	(0.0503)	(0.0705)	(0.0475)
Intercept	5.564***	2.626	5.699***	2.638*	4.745***	2.075	5.001***	1.829	5.441***	2.373	5.168***	2.195
Intercept	(1.008)	(1.606)	(1.048)	(1.602)	(1.052)	(1.582)	(0.952)	(1.584)	(1.032)	(1.589)	(1.042)	(1.573)
Observations	826	891	826	891	826	891	826	891	826	891	826	891
Wald χ²	1883.34	456.45		489.80		449.96	2204.97	432.57	1595.96	445.29		443.63
Pseudo R²	0.5453	0.4784	0.5436	0.4819	0.5446	0.4788	0.5372	0.4776	0.5469	0.4775	0.5490	0.4774

Note(s): Estimated coefficients (std. errors) using the logit regression of equation (2). The dependent variable is CLEAN in all the regressions. The first row indicates the centrality measure used. All the estimations include year and industry-fixed effects and clustering by firm. See Appendix I for the definition of the variables. ***, **, * for 1%, 5% and 10% significance level

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