Endogeneity and instrumental variables
| Panel A change analysis | ||
|---|---|---|
| ΔCash | ||
| Coefficients | t-statistic | |
| ΔHeter | 0.014** | (1.962) |
| ΔOcf | 0.194*** | (21.535) |
| ΔSdsale | 0.029 | (1.020) |
| ΔLev | −0.058*** | (−5.657) |
| ΔSize | 0.028*** | (8.484) |
| ΔBtm | 0.004 | (1.340) |
| ΔIndcomp | −0.040 | (−1.331) |
| Age | 0.001*** | (13.835) |
| Soe | 0.003*** | (4.355) |
| Constant | −0.004 | (−1.143) |
| Industry fixed effects | Yes | |
| Year fixed effects | Yes | |
| Observations | 24,207 | |
| Adjusted R-squared | 0.086 | |
| Note(s): *, ** and *** represent significance levels of 0.10, 0.05 and 0.01, respectively. OLS regression is adopted and standard errors are clustered at firm level | ||
| Panel A change analysis | ||
|---|---|---|
| Δ | ||
| Coefficients | ||
| Δ | ||
| Δ | 0.194*** | (21.535) |
| Δ | 0.029 | (1.020) |
| Δ | −0.058*** | (−5.657) |
| Δ | 0.028*** | (8.484) |
| Δ | 0.004 | (1.340) |
| Δ | −0.040 | (−1.331) |
| Age | 0.001*** | (13.835) |
| Soe | 0.003*** | (4.355) |
| Constant | −0.004 | (−1.143) |
| Industry fixed effects | Yes | |
| Year fixed effects | Yes | |
| Observations | 24,207 | |
| Adjusted | 0.086 | |
| Panel B controlling for firm fixed effects | ||
|---|---|---|
| Cash | ||
| Coefficients | t-statistic | |
| Heter | 0.022*** | (2.600) |
| Ocf | 0.170*** | (13.469) |
| Sdsale | 0.044 | (1.470) |
| Lev | −0.179*** | (−16.093) |
| Size | −0.003 | (−1.265) |
| Btm | −0.004 | (−0.897) |
| Indcomp | −0.220*** | (−6.215) |
| Dual | 0.005* | (1.800) |
| Firstshr | 0.057*** | (3.623) |
| Age | 0.002*** | (5.129) |
| Soe | −0.009 | (−1.238) |
| Constant | 0.218*** | (3.830) |
| Firm fixed effects | Yes | |
| Industry fixed effects | Yes | |
| Year fixed effects | Yes | |
| Observations | 26,890 | |
| Adjusted R-squared | 0.103 | |
| Note(s): *, ** and *** represent significance levels of 0.10, 0.05 and 0.01, respectively. Standard errors are clustered at firm level | ||
| Panel B controlling for firm fixed effects | ||
|---|---|---|
| Coefficients | ||
| 0.170*** | (13.469) | |
| 0.044 | (1.470) | |
| −0.179*** | (−16.093) | |
| −0.003 | (−1.265) | |
| −0.004 | (−0.897) | |
| −0.220*** | (−6.215) | |
| 0.005* | (1.800) | |
| 0.057*** | (3.623) | |
| 0.002*** | (5.129) | |
| −0.009 | (−1.238) | |
| Constant | 0.218*** | (3.830) |
| Firm fixed effects | Yes | |
| Industry fixed effects | Yes | |
| Year fixed effects | Yes | |
| Observations | 26,890 | |
| Adjusted | 0.103 | |
| Panel C two-stage regression with the instrumental variable | ||||
|---|---|---|---|---|
| (1) Heter | (2) Cash | |||
| Coefficients | t-statistic | Coefficients | t-statistic | |
| IPOHeter | 0.218*** | (38.189) | ||
| Heter | 0.224*** | (10.033) | ||
| Ocf | −0.019 | (−1.224) | 0.215*** | (16.364) |
| Sdsale | 0.246*** | (7.962) | 0.014 | (0.509) |
| Lev | −0.077*** | (−9.780) | −0.255*** | (−36.420) |
| Size | 0.008*** | (6.301) | −0.004*** | (−3.435) |
| Btm | −0.028*** | (−5.842) | −0.011*** | (−2.665) |
| Indcomp | −0.192*** | (−6.997) | −0.178*** | (−7.414) |
| Dual | 0.006** | (2.512) | 0.006*** | (3.161) |
| Firstshr | −0.008 | (−0.999) | 0.041*** | (6.311) |
| Age | −0.001*** | (−2.753) | −0.001*** | (−3.907) |
| Soe | −0.002 | (−0.764) | 0.003 | (1.392) |
| Constant | −0.821*** | (−31.136) | 0.430*** | (13.513) |
| Industry fixed effects | Yes | Yes | ||
| Year fixed effects | Yes | Yes | ||
| Observations | 17,148 | 17,148 | ||
| Adjusted R-squared | 0.430 | 0.236 | ||
| F-statistic of the IV | 1458.4 | |||
| Panel C two-stage regression with the instrumental variable | ||||
|---|---|---|---|---|
| (1) | (2) | |||
| Coefficients | Coefficients | |||
| −0.019 | (−1.224) | 0.215*** | (16.364) | |
| 0.246*** | (7.962) | 0.014 | (0.509) | |
| −0.077*** | (−9.780) | −0.255*** | (−36.420) | |
| 0.008*** | (6.301) | −0.004*** | (−3.435) | |
| −0.028*** | (−5.842) | −0.011*** | (−2.665) | |
| −0.192*** | (−6.997) | −0.178*** | (−7.414) | |
| 0.006** | (2.512) | 0.006*** | (3.161) | |
| −0.008 | (−0.999) | 0.041*** | (6.311) | |
| −0.001*** | (−2.753) | −0.001*** | (−3.907) | |
| −0.002 | (−0.764) | 0.003 | (1.392) | |
| Constant | −0.821*** | (−31.136) | 0.430*** | (13.513) |
| Industry fixed effects | Yes | Yes | ||
| Year fixed effects | Yes | Yes | ||
| Observations | 17,148 | 17,148 | ||
| Adjusted | 0.430 | 0.236 | ||
| 1458.4 | ||||
Note(s): Two-stage least-squares regression is adopted. Standard errors are clustered at firm level and t-statistics are reported in parentheses. *, ** and *** represent significance levels of 0.10, 0.05 and 0.01, respectively
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