Table 12 Audit committee centrality and...

Table 12

Audit committee centrality and audit opinion in ordered 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	−0.292**	−0.162*	−0.372**	−0.167*	−0.198***	0.0666	−0.0485	0.0875	−0.204**	−0.0302	−0.384**	−0.00591
CENTRALITY	(0.133)	(0.0956)	(0.157)	(0.0875)	(0.0708)	(0.0699)	(0.0651)	(0.0652)	(0.0795)	(0.0640)	(0.159)	(0.124)
SIZE	0.104	0.346***	0.0713	0.341***	0.0360	0.309***	0.0605	0.294***	0.0797	0.316***	0.0622	0.308***
SIZE	(0.0853)	(0.0809)	(0.0790)	(0.0822)	(0.0818)	(0.0815)	(0.0806)	(0.0840)	(0.0825)	(0.0825)	(0.0785)	(0.0822)
LEV	−0.633	0.104	−0.488	0.139	−0.670	0.108	−0.470	−0.0348	−0.638	0.145	−0.508	0.123
LEV	(0.827)	(0.893)	(0.814)	(0.896)	(0.865)	(0.898)	(0.817)	(0.858)	(0.849)	(0.881)	(0.851)	(0.865)
ROA	2.303*	−0.326	2.270*	−0.347	2.051	−0.449	2.330*	−0.530	2.195*	−0.198	2.147*	−0.261
ROA	(1.290)	(1.855)	(1.258)	(1.832)	(1.318)	(1.801)	(1.285)	(1.812)	(1.309)	(1.816)	(1.304)	(1.821)
EXP	−0.614*	−0.0556	−0.544*	0.0162	−0.525*	−0.0947	−0.551*	−0.0901	−0.573*	−0.0651	−0.518*	−0.0805
EXP	(0.329)	(0.339)	(0.314)	(0.347)	(0.313)	(0.347)	(0.327)	(0.347)	(0.328)	(0.342)	(0.301)	(0.337)
RECEI	0.791	1.383**	0.673	1.387**	0.334	1.440**	0.336	1.413**	0.628	1.416**	0.568	1.426**
RECEI	(0.818)	(0.610)	(0.800)	(0.611)	(0.846)	(0.636)	(0.825)	(0.638)	(0.813)	(0.628)	(0.812)	(0.637)
LOSS	0.518**	−0.0192	0.541**	0.00300	0.517**	−0.0178	0.543**	−0.0258	0.512**	−0.00726	0.514*	−0.0118
LOSS	(0.259)	(0.209)	(0.264)	(0.212)	(0.262)	(0.209)	(0.253)	(0.208)	(0.260)	(0.208)	(0.273)	(0.208)
LOSS_t−1	−1.653***	−1.407***	−1.625***	−1.382***	−1.649***	−1.432***	−1.666***	−1.411***	−1.658***	−1.417***	−1.632***	−1.422***
LOSS_t−1	(0.192)	(0.166)	(0.193)	(0.166)	(0.196)	(0.165)	(0.197)	(0.163)	(0.196)	(0.168)	(0.194)	(0.168)
AC_SIZE	0.0763*	−0.0361	0.0722	−0.0404	0.0552	−0.0308	0.0679	−0.0380	0.0676	−0.0464	0.0517	−0.0443
AC_SIZE	(0.0455)	(0.0361)	(0.0470)	(0.0354)	(0.0448)	(0.0385)	(0.0470)	(0.0351)	(0.0450)	(0.0358)	(0.0450)	(0.0371)
AC_MEET	−0.0157	0.0154	−0.0171	0.0155	−0.0174	0.0144	−0.0191	0.0167	−0.0154	0.0134	−0.0188	0.0138
AC_MEET	(0.0404)	(0.0313)	(0.0408)	(0.0305)	(0.0406)	(0.0302)	(0.0403)	(0.0301)	(0.0405)	(0.0302)	(0.0410)	(0.0302)
B_MEET	0.0744***	0.00387	0.0732***	0.00406	0.0768***	0.00252	0.0804***	0.00333	0.0721***	0.00467	0.0727***	0.00424
B_MEET	(0.0261)	(0.0211)	(0.0267)	(0.0211)	(0.0261)	(0.0202)	(0.0259)	(0.0208)	(0.0255)	(0.0206)	(0.0267)	(0.0206)
B_INDEP	−0.878**	−0.491	−0.679**	−0.387	−0.548	−0.484	−0.584*	−0.471	−0.688*	−0.482	−0.658*	−0.490
B_INDEP	(0.385)	(0.313)	(0.341)	(0.328)	(0.341)	(0.320)	(0.341)	(0.319)	(0.356)	(0.320)	(0.347)	(0.319)
BIG4	0.438	−0.868***	0.382	−0.843***	0.358	−0.849***	0.355	−0.830***	0.427	−0.856***	0.403	−0.851***
BIG4	(0.414)	(0.215)	(0.406)	(0.213)	(0.409)	(0.219)	(0.397)	(0.218)	(0.402)	(0.218)	(0.413)	(0.215)
AF_t−1	0.0224	−0.0565	0.0324	−0.0687	0.0182	−0.0669	0.0233	−0.0701	0.0223	−0.0601	0.0147	−0.0626
AF_t−1	(0.0773)	(0.0709)	(0.0761)	(0.0698)	(0.0793)	(0.0699)	(0.0757)	(0.0707)	(0.0785)	(0.0705)	(0.0781)	(0.0702)
RLAW	−0.472**	−0.184	−0.434**	−0.156	−0.451**	−0.202	−0.444**	−0.226	−0.461**	−0.201	−0.475***	−0.209
RLAW	(0.184)	(0.170)	(0.180)	(0.176)	(0.182)	(0.176)	(0.179)	(0.175)	(0.183)	(0.171)	(0.183)	(0.174)
REST_LINKS	0.0307	0.0151	0.0385	0.0149	0.0315	0.00890	0.0287	0.0130	0.0318	0.00837	0.0356	0.00794
REST_LINKS	(0.0585)	(0.0494)	(0.0577)	(0.0498)	(0.0591)	(0.0491)	(0.0564)	(0.0493)	(0.0595)	(0.0494)	(0.0602)	(0.0493)
LINKS_TOTAL	0.0495	0.0403	0.00507	0.0228	0.0537	0.00361	0.0130	−0.000357	0.0685	0.0295	0.0478	0.0205
LINKS_TOTAL	(0.0599)	(0.0394)	(0.0502)	(0.0391)	(0.0552)	(0.0414)	(0.0494)	(0.0403)	(0.0585)	(0.0415)	(0.0529)	(0.0409)
Observations	863	935	863	935	863	935	863	935	863	935	863	935
Pseudo R2	0.4283	0.3785	0.4255	0.3805	0.4279	0.3765	0.4223	0.3784	0.4298	0.3762	0.4295	0.3759

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	−0.292**	−0.162*	−0.372**	−0.167*	−0.198***	0.0666	−0.0485	0.0875	−0.204**	−0.0302	−0.384**	−0.00591
CENTRALITY	(0.133)	(0.0956)	(0.157)	(0.0875)	(0.0708)	(0.0699)	(0.0651)	(0.0652)	(0.0795)	(0.0640)	(0.159)	(0.124)
SIZE	0.104	0.346***	0.0713	0.341***	0.0360	0.309***	0.0605	0.294***	0.0797	0.316***	0.0622	0.308***
SIZE	(0.0853)	(0.0809)	(0.0790)	(0.0822)	(0.0818)	(0.0815)	(0.0806)	(0.0840)	(0.0825)	(0.0825)	(0.0785)	(0.0822)
LEV	−0.633	0.104	−0.488	0.139	−0.670	0.108	−0.470	−0.0348	−0.638	0.145	−0.508	0.123
LEV	(0.827)	(0.893)	(0.814)	(0.896)	(0.865)	(0.898)	(0.817)	(0.858)	(0.849)	(0.881)	(0.851)	(0.865)
ROA	2.303*	−0.326	2.270*	−0.347	2.051	−0.449	2.330*	−0.530	2.195*	−0.198	2.147*	−0.261
ROA	(1.290)	(1.855)	(1.258)	(1.832)	(1.318)	(1.801)	(1.285)	(1.812)	(1.309)	(1.816)	(1.304)	(1.821)
EXP	−0.614*	−0.0556	−0.544*	0.0162	−0.525*	−0.0947	−0.551*	−0.0901	−0.573*	−0.0651	−0.518*	−0.0805
EXP	(0.329)	(0.339)	(0.314)	(0.347)	(0.313)	(0.347)	(0.327)	(0.347)	(0.328)	(0.342)	(0.301)	(0.337)
RECEI	0.791	1.383**	0.673	1.387**	0.334	1.440**	0.336	1.413**	0.628	1.416**	0.568	1.426**
RECEI	(0.818)	(0.610)	(0.800)	(0.611)	(0.846)	(0.636)	(0.825)	(0.638)	(0.813)	(0.628)	(0.812)	(0.637)
LOSS	0.518**	−0.0192	0.541**	0.00300	0.517**	−0.0178	0.543**	−0.0258	0.512**	−0.00726	0.514*	−0.0118
LOSS	(0.259)	(0.209)	(0.264)	(0.212)	(0.262)	(0.209)	(0.253)	(0.208)	(0.260)	(0.208)	(0.273)	(0.208)
LOSS_t−1	−1.653***	−1.407***	−1.625***	−1.382***	−1.649***	−1.432***	−1.666***	−1.411***	−1.658***	−1.417***	−1.632***	−1.422***
LOSS_t−1	(0.192)	(0.166)	(0.193)	(0.166)	(0.196)	(0.165)	(0.197)	(0.163)	(0.196)	(0.168)	(0.194)	(0.168)
AC_SIZE	0.0763*	−0.0361	0.0722	−0.0404	0.0552	−0.0308	0.0679	−0.0380	0.0676	−0.0464	0.0517	−0.0443
AC_SIZE	(0.0455)	(0.0361)	(0.0470)	(0.0354)	(0.0448)	(0.0385)	(0.0470)	(0.0351)	(0.0450)	(0.0358)	(0.0450)	(0.0371)
AC_MEET	−0.0157	0.0154	−0.0171	0.0155	−0.0174	0.0144	−0.0191	0.0167	−0.0154	0.0134	−0.0188	0.0138
AC_MEET	(0.0404)	(0.0313)	(0.0408)	(0.0305)	(0.0406)	(0.0302)	(0.0403)	(0.0301)	(0.0405)	(0.0302)	(0.0410)	(0.0302)
B_MEET	0.0744***	0.00387	0.0732***	0.00406	0.0768***	0.00252	0.0804***	0.00333	0.0721***	0.00467	0.0727***	0.00424
B_MEET	(0.0261)	(0.0211)	(0.0267)	(0.0211)	(0.0261)	(0.0202)	(0.0259)	(0.0208)	(0.0255)	(0.0206)	(0.0267)	(0.0206)
B_INDEP	−0.878**	−0.491	−0.679**	−0.387	−0.548	−0.484	−0.584*	−0.471	−0.688*	−0.482	−0.658*	−0.490
B_INDEP	(0.385)	(0.313)	(0.341)	(0.328)	(0.341)	(0.320)	(0.341)	(0.319)	(0.356)	(0.320)	(0.347)	(0.319)
BIG4	0.438	−0.868***	0.382	−0.843***	0.358	−0.849***	0.355	−0.830***	0.427	−0.856***	0.403	−0.851***
BIG4	(0.414)	(0.215)	(0.406)	(0.213)	(0.409)	(0.219)	(0.397)	(0.218)	(0.402)	(0.218)	(0.413)	(0.215)
AF_t−1	0.0224	−0.0565	0.0324	−0.0687	0.0182	−0.0669	0.0233	−0.0701	0.0223	−0.0601	0.0147	−0.0626
AF_t−1	(0.0773)	(0.0709)	(0.0761)	(0.0698)	(0.0793)	(0.0699)	(0.0757)	(0.0707)	(0.0785)	(0.0705)	(0.0781)	(0.0702)
RLAW	−0.472**	−0.184	−0.434**	−0.156	−0.451**	−0.202	−0.444**	−0.226	−0.461**	−0.201	−0.475***	−0.209
RLAW	(0.184)	(0.170)	(0.180)	(0.176)	(0.182)	(0.176)	(0.179)	(0.175)	(0.183)	(0.171)	(0.183)	(0.174)
REST_LINKS	0.0307	0.0151	0.0385	0.0149	0.0315	0.00890	0.0287	0.0130	0.0318	0.00837	0.0356	0.00794
REST_LINKS	(0.0585)	(0.0494)	(0.0577)	(0.0498)	(0.0591)	(0.0491)	(0.0564)	(0.0493)	(0.0595)	(0.0494)	(0.0602)	(0.0493)
LINKS_TOTAL	0.0495	0.0403	0.00507	0.0228	0.0537	0.00361	0.0130	−0.000357	0.0685	0.0295	0.0478	0.0205
LINKS_TOTAL	(0.0599)	(0.0394)	(0.0502)	(0.0391)	(0.0552)	(0.0414)	(0.0494)	(0.0403)	(0.0585)	(0.0415)	(0.0529)	(0.0409)
Observations	863	935	863	935	863	935	863	935	863	935	863	935
Pseudo R2	0.4283	0.3785	0.4255	0.3805	0.4279	0.3765	0.4223	0.3784	0.4298	0.3762	0.4295	0.3759

Note(s): Estimated coefficients (std. errors) using the logit regression of equation (3). The dependent variable is OPINION_CAT 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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