Code of Ethics Quality and the Cost of Equity – Multivariate results
| Dependent variable: r_AVG | |||
|---|---|---|---|
| Predicted sign | (1) | (2) | |
| ETHICS | − | −0.342** (−2.38) | −0.288*** (−3.06) |
| BETA | + | 0.141 (1.58) | |
| SIZE | − | −0.899*** (−3.62) | |
| BTM | + | 0.335* (1.73) | |
| LEV | + | 0.581 (0.53) | |
| LTG | + | 7.673*** (3.13) | |
| DISP | + | 4.275*** (5.58) | |
| DIV | − | −0.008*** (−2.41) | |
| GOV | − | 0.009 (0.59) | |
| CSR | − | 0.322* (1.71) | |
| INST | − | −0.023 (−0.76) | |
| ANACOV | − | 0.038** (2.01) | |
| ANABIAS | + | 1.879 (0.49) | |
| Year fixed effects | Yes | Yes | |
| Industry fixed effects | Yes | Yes | |
| N | 2,207 | 2,207 | |
| R2 | 3.56% | 13.68% | |
| Dependent variable: | |||
|---|---|---|---|
| Predicted sign | (1) | (2) | |
| − | −0.288*** (−3.06) | ||
| + | 0.141 (1.58) | ||
| − | −0.899*** (−3.62) | ||
| + | 0.335* (1.73) | ||
| + | 0.581 (0.53) | ||
| + | 7.673*** (3.13) | ||
| + | 4.275*** (5.58) | ||
| − | −0.008*** (−2.41) | ||
| − | 0.009 (0.59) | ||
| − | 0.322* (1.71) | ||
| − | −0.023 (−0.76) | ||
| 0.038** (2.01) | |||
| + | 1.879 (0.49) | ||
| Year fixed effects | Yes | Yes | |
| Industry fixed effects | Yes | Yes | |
| 2,207 | 2,207 | ||
| 3.56% | 13.68% | ||
Note(s): This table presents the regression results of regressing the average cost of equity (r_AVG) on ETHICS and controls over the sample period between 2004 and 2012. Robust standard errors are clustered by firms. t-statistics are reported inside the parentheses. ***, **, and * indicate statistical significance at the 0.01, 0.05, and 0.10 level, respectively. A more detailed description of the variables is in Appendix A