Table 3 Political uncertainty and...

Table 3

Political uncertainty and asymmetry of operating costs

	Exp. sign	(1)	(2)
$Δ l n S A L E_{t}$	$+$	0.995*** (144.039)	0.987*** (76.564)
$Δ lnSAL E_{t} \times D_{t}$	−	−0.042*** (−5.178)	−0.102*** (−4.285)
$Δ l n S A L E_{t} \times T U R N O V E R_{t}$			−0.007 (−1.531)
$Δ lnSAL E_{t} \times D_{t} \times TURNOVE R_{t}$	−		−0.028*** (−2.761)
$Δ l n S A L E_{t} \times G D P_{t}$			0.136* (1.815)
$Δ l n S A L E_{t} \times U N E M P_{t}$			−0.063 (−0.740)
$Δ l n S A L E_{t} \times l n A N I T_{t}$			0.005 (1.261)
$Δ l n S A L E_{t} \times l n E M P I N T_{t}$			0.001 (0.476)
$Δ l n S A L E_{t} \times D_{t} \times G D P_{t}$	−		−0.551** (−2.380)
$Δ l n S A L E_{t} \times D_{t} \times U N E M P_{t}$	$+$		0.938* (1.716)
$Δ l n S A L E_{t} \times D_{t} \times l n A N I T_{t}$	−		−0.025*** (−3.379)
$Δ l n S A L E_{t} \times D_{t} \times l n E M P I N T_{t}$	−		−0.038*** (−7.275)
$Δ l n S A L E_{t} \times D_{t} \times L A G D_{t}$	$+$		0.044*** (4.808)
$I n t e r c e p t$		0.004*** (5.368)	0.004*** (5.493)
Year fixed effect		Yes	Yes
Firm fixed effect		Yes	Yes
Observations		20,392	20,392
Adjusted $R^{2}$		0.857	0.778

	Exp. sign	(1)	(2)
$Δ l n S A L E_{t}$	$+$	0.995*** (144.039)	0.987*** (76.564)
$Δ lnSAL E_{t} \times D_{t}$	−	−0.042*** (−5.178)	−0.102*** (−4.285)
$Δ l n S A L E_{t} \times T U R N O V E R_{t}$			−0.007 (−1.531)
$Δ lnSAL E_{t} \times D_{t} \times TURNOVE R_{t}$	−		−0.028*** (−2.761)
$Δ l n S A L E_{t} \times G D P_{t}$			0.136* (1.815)
$Δ l n S A L E_{t} \times U N E M P_{t}$			−0.063 (−0.740)
$Δ l n S A L E_{t} \times l n A N I T_{t}$			0.005 (1.261)
$Δ l n S A L E_{t} \times l n E M P I N T_{t}$			0.001 (0.476)
$Δ l n S A L E_{t} \times D_{t} \times G D P_{t}$	−		−0.551** (−2.380)
$Δ l n S A L E_{t} \times D_{t} \times U N E M P_{t}$	$+$		0.938* (1.716)
$Δ l n S A L E_{t} \times D_{t} \times l n A N I T_{t}$	−		−0.025*** (−3.379)
$Δ l n S A L E_{t} \times D_{t} \times l n E M P I N T_{t}$	−		−0.038*** (−7.275)
$Δ l n S A L E_{t} \times D_{t} \times L A G D_{t}$	$+$		0.044*** (4.808)
$I n t e r c e p t$		0.004*** (5.368)	0.004*** (5.493)
Year fixed effect		Yes	Yes
Firm fixed effect		Yes	Yes
Observations		20,392	20,392
Adjusted $R^{2}$		0.857	0.778

Note(s): This table presents the results of testing the impact of political uncertainty on the asymmetric behavior of operating costs. The dependent variable is $Δ l n X O P R$ ⁠, the log-change in deflated operating costs. Column (1) presents the basic results of testing the presence of cost stickiness. Column (2) adds the key variable, prefecture-city official turnover $T U R N O V E R$ ⁠, into the analysis. $T U R N O V E R$ is a dummy variable that takes the value of one if either the city head or mayor is changed in year $t$ ⁠, and zero otherwise. $Δ l n S A L E$ is the log-change in deflated sales. $D$ is a dummy variable that takes the value of one if sales decrease, and zero otherwise. Control variables include firm characteristics and local economic factors. All variables are defined in the Table A1. Robust t-statistics reported in parentheses are based on standard errors clustered by firm. In this table, *, **, and *** denote statistical significance at the 10, 5, and 1% levels, respectively

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