Table 5

Individual measure of code of ethics quality and individual estimate of the cost of equity

Dependent variable:
Individual Cost of equity Estimates		Dependent variable: r_AVG
r_GLSr_CTr_OJr_ET
Predicted sign(1)(2)(3)(4)(5)(6)(7)(8)(9)
ETHICS−−0.324*** (−5.53)−0.265** (−2.29)−0.626** (−2.17)−0.468** (−2.38)     
SYSTEM−    −0.096 (−1.45)   −0.430*** (−3.14)
IMPLEMENT−     −0.141 (−1.59)  −0.044* (−1.76)
CORRUPT−      −0.255** (−1.91) −0.560*** (−4.01)
HUMAN−       −0.404** (−2.00)−0.397* (−1.98)
Control variables YesYesYesYesYesYesYesYesYes
Year fixed effects YesYesYesYesYesYesYesYesYes
Industry fixed effects YesYesYesYesYesYesYesYesYes
N 2,2072,2072,2072,2072,2072,2072,2072,2072,207
R2 19.78%13.43%5.21%15.14%13.47%13.51%13.66%13.65%14.24%

Note(s): This table presents the regression results of regressing the average cost of equity (r_AVG) on ETHICS and control variables 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

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