Table 4

Growth in the market value of firms and the speed of adjustment

PreCOVIDCOVIDPreCOVIDCOVID
VariableΔBook levΔBook levΔMarket levΔMarket lev
Panel A Low 20 (Rank 1). This group represent the least 20% valued firms
Book Dev0.036***0.042***  
(0.011)(0.011)  
Market Dev  0.241***0.299***
  (0.018)(0.018)
Constant0.024***0.003−0.017***0.035***
(0.003)(0.003)(0.001)(0.002)
Observations2,9942,2912,9942,291
R-squared0.2160.2440.3520.359
Firm FEYesYesYesYes
Qtr FEYesYesYesYes
Panel B (Rank 2). This group represent the next 20% most valued firms after bottom 20% least valued firms
Book Dev0.050***0.121***  
(0.012)(0.012)  
Market Dev  0.272***0.278***
  (0.020)(0.018)
Constant0.012***−0.007***−0.036***−0.074***
(0.001)(0.001)(0.004)(0.003)
Observations2,5482,0272,5482,027
R-squared0.3280.3610.3850.497
Firm FEYesYesYesYes
Qtr FEYesYesYesYes
Panel C (Rank 3). This represents the third group of most valued firms based on their market values
Book Dev0.055***0.068***  
(0.012)(0.014)  
Market Dev  0.151***0.188***
  (0.017)(0.018)
Constant0.002−0.010***−0.029***−0.070***
(0.002)(0.002)(0.005)(0.005)
Observations2,3651,9742,3651,974
R-squared0.3040.3180.3760.414
Firm FEYesYesYesYes
Qtr FEYesYesYesYes
Panel D (Rank 4). This group represents second group most valued firms next to the top-most valued firms
Book Dev0.050***0.142***  
(0.014)(0.013)  
Market Dev  0.100***0.068***
  (0.016)(0.012)
Constant−0.007−0.050***−0.029***−0.042***
(0.004)(0.004)(0.007)(0.005)
Observations2,3192,3692,3192,369
R-squared0.2740.3050.3430.395
Firm FEYesYesYesYes
Qtr FEYesYesYesYes
Panel E top 20 (Rank 5). This group represents the top 20% most valued firms
Book Dev0.0110.082***  
(0.010)(0.010)  
Market Dev  0.0190.030***
  (0.014)(0.009)
Constant−0.002−0.071***−0.005−0.028***
(0.009)(0.008)(0.008)(0.005)
Observations2,3712,5982,3712,598
R-squared0.2710.2230.3010.288
Firm FEYesYesYesYes
Qtr FEYesYesYesYes

Note(s): Table 4 displays how sensitive the SOA is to firm’s market value. Each panel presents the results from the baseline model for each group in examining the variation in the SOA. PreCOVID and COVID samples range between 2018Q3-2020Q1 and 2020Q2-2021Q4 respectively. Robust standard errors are presented in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1 signifies significance at 1%, 5%, and 10% respectively

Source(s): Table by authors

[ViewLarge]
This Feature Is Available To Subscribers Only

or Create an Account

Close Modal
Close Modal