Impact of institutional quality on accruals quality
| |DACC|DDit | |DACC|KLWit | |||||
|---|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | (6) | |
| INTERCEPT | 0.072** (2.57) | 0.070** (2.06) | 0.074** (2.14) | 0.018 (1.57) | 0.014 (1.08) | 0.030* (1.90) |
| Compit − 1z | 0.013*** (3.19) | 0.014*** (2.62) | 0.008* (1.84) | 0.008** (2.19) | 0.006* (1.85) | 0.024** (2.30) |
| Compit − 1 × IQ | −0.020*** (−4.31) | −0.008*** (−3.10) | ||||
| Post | −0.015** (−2.20) | −0.004 (−1.49) | ||||
| Compit − 1 × Post | −0.023** (−2.06) | −0.021* (−1.74) | ||||
| Inside_Director_Ownership it − 1 | 0.000 (0.10) | 0.001 (0.33) | 0.001 (0.37) | −0.000 (−0.11) | 0.000 (0.01) | −0.000 (−0.17) |
| Size it − 1 | −0.005*** (−8.61) | −0.007*** (−6.09) | −0.007*** (−6.92) | −0.003*** (−8.15) | −0.004*** (−9.23) | −0.003*** (−7.91) |
| MTBit − 1 | 0.001*** (3.45) | 0.001*** (4.09) | 0.001** (2.31) | 0.001*** (5.81) | 0.001*** (5.31) | 0.001*** (5.71) |
| Leverageit − 1 | 0.036*** (10.41) | 0.046*** (10.11) | 0.052*** (11.47) | 0.005*** (5.68) | 0.012*** (7.76) | 0.005*** (5.57) |
| StdROAit − 1 | −0.020* (−1.78) | −0.033*** (−4.32) | −0.034*** (−4.36) | −0.015** (−2.46) | −0.023*** (−5.12) | −0.015** (−2.49) |
| CFOit − 1 | 0.084*** (5.40) | 0.092*** (4.78) | 0.144*** (6.73) | −0.033*** (−11.25) | −0.024*** (−5.50) | −0.033*** (−11.32) |
| Δsales it − 1 | 0.008*** (7.14) | 0.011*** (9.33) | 0.010*** (8.58) | 0.004*** (3.41) | 0.004*** (5.17) | 0.004*** (3.44) |
| RND it − 1 | 0.086*** (7.58) | 0.013*** (3.57) | 0.012*** (3.95) | 0.004 (0.48) | 0.000 (0.13) | 0.004 (0.49) |
| IFRS it − 1 | −0.009*** (−4.63) | −0.010*** (−4.24) | −0.010*** (−4.65) | −0.002 (−1.65) | −0.003 (−1.43) | −0.003** (−2.16) |
| LogGDPjt − 1 | 0.002 (0.61) | 0.003 (0.67) | 0.002 (0.44) | 0.001 (0.80) | 0.002 (0.80) | 0.001 (0.23) |
| LogMKTjt − 1 | −0.002* (−1.77) | −0.002 (−1.42) | −0.001 (−0.81) | 0.002 (1.33) | 0.002 (1.58) | 0.002 (1.37) |
| FDIjt − 1 | 0.012*** (2.81) | 0.022*** (3.47) | 0.028*** (3.31) | 0.021*** (4.01) | 0.025*** (3.71) | 0.022*** (3.96) |
| ITLj | −0.010 (−1.51) | −0.011 (−1.38) | −0.010 (−1.35) | 0.001 (0.23) | 0.001 (0.32) | −0.000 (−0.09) |
| Takeoverj | −0.000 (−0.04) | −0.001 (−0.34) | −0.001 (−0.46) | 0.001 (0.50) | 0.000 (0.01) | 0.000 (0.42) |
| Firm FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Year FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Cluster by country | Yes | Yes | Yes | Yes | Yes | Yes |
| N | 179,483 | 179,483 | 179,483 | 192,811 | 192,811 | 192,811 |
| Adj. R2 | 0.048 | 0.046 | 0.060 | 0.021 | 0.019 | 0.022 |
| (1) | (2) | (3) | (4) | (5) | (6) | |
|---|---|---|---|---|---|---|
| 0.072** (2.57) | 0.070** (2.06) | 0.074** (2.14) | 0.018 (1.57) | 0.014 (1.08) | 0.030* (1.90) | |
| 0.013*** (3.19) | 0.014*** (2.62) | 0.008* (1.84) | 0.008** (2.19) | 0.006* (1.85) | 0.024** (2.30) | |
| −0.020*** (−4.31) | −0.008*** (−3.10) | |||||
| −0.015** (−2.20) | −0.004 (−1.49) | |||||
| −0.023** (−2.06) | −0.021* (−1.74) | |||||
| 0.000 (0.10) | 0.001 (0.33) | 0.001 (0.37) | −0.000 (−0.11) | 0.000 (0.01) | −0.000 (−0.17) | |
| −0.005*** (−8.61) | −0.007*** (−6.09) | −0.007*** (−6.92) | −0.003*** (−8.15) | −0.004*** (−9.23) | −0.003*** (−7.91) | |
| 0.001*** (3.45) | 0.001*** (4.09) | 0.001** (2.31) | 0.001*** (5.81) | 0.001*** (5.31) | 0.001*** (5.71) | |
| 0.036*** (10.41) | 0.046*** (10.11) | 0.052*** (11.47) | 0.005*** (5.68) | 0.012*** (7.76) | 0.005*** (5.57) | |
| −0.020* (−1.78) | −0.033*** (−4.32) | −0.034*** (−4.36) | −0.015** (−2.46) | −0.023*** (−5.12) | −0.015** (−2.49) | |
| 0.084*** (5.40) | 0.092*** (4.78) | 0.144*** (6.73) | −0.033*** (−11.25) | −0.024*** (−5.50) | −0.033*** (−11.32) | |
| 0.008*** (7.14) | 0.011*** (9.33) | 0.010*** (8.58) | 0.004*** (3.41) | 0.004*** (5.17) | 0.004*** (3.44) | |
| 0.086*** (7.58) | 0.013*** (3.57) | 0.012*** (3.95) | 0.004 (0.48) | 0.000 (0.13) | 0.004 (0.49) | |
| −0.009*** (−4.63) | −0.010*** (−4.24) | −0.010*** (−4.65) | −0.002 (−1.65) | −0.003 (−1.43) | −0.003** (−2.16) | |
| 0.002 (0.61) | 0.003 (0.67) | 0.002 (0.44) | 0.001 (0.80) | 0.002 (0.80) | 0.001 (0.23) | |
| −0.002* (−1.77) | −0.002 (−1.42) | −0.001 (−0.81) | 0.002 (1.33) | 0.002 (1.58) | 0.002 (1.37) | |
| 0.012*** (2.81) | 0.022*** (3.47) | 0.028*** (3.31) | 0.021*** (4.01) | 0.025*** (3.71) | 0.022*** (3.96) | |
| −0.010 (−1.51) | −0.011 (−1.38) | −0.010 (−1.35) | 0.001 (0.23) | 0.001 (0.32) | −0.000 (−0.09) | |
| −0.000 (−0.04) | −0.001 (−0.34) | −0.001 (−0.46) | 0.001 (0.50) | 0.000 (0.01) | 0.000 (0.42) | |
| Firm FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Year FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Cluster by country | Yes | Yes | Yes | Yes | Yes | Yes |
| 179,483 | 179,483 | 179,483 | 192,811 | 192,811 | 192,811 | |
| Adj. | 0.048 | 0.046 | 0.060 | 0.021 | 0.019 | 0.022 |
Note(s): This table reports the regression results on how industry competition affects accruals quality, conditional on institutional quality. The dependent variable is accruals quality measures. Two institutional quality proxies are used: (1) the prevailing institutional quality level, IQ; (2) the change in institutional quality, captured by board reforms between 1998 and 2007. Post is a dummy variable that is equal to one if it is post-reform years and otherwise 0. Comp is the proxy of product market competition. The sample period spans from 1990 to 2012. t-statistics are reported in parentheses and are based on standard errors adjusted for clustering at the country level. ***, **, and * indicate significance levels of 1, 5, and 10%, respectively
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