Effect of overinvestment on the relationship between NON_EX and RISK2
| Dependent variable RISK2 | Overinvesting firms | Underinvesting firms | ||
|---|---|---|---|---|
| (Measure 1) | (Measure 2) | (Measure 1) | (Measure 2) | |
| NON_EX | 0.00449 (1.42) | 0.00697** (2.30) | 0.00760*** (2.90) | 0.0103*** (3.53) |
| FSIZE | −0.00476*** (−3.23) | −0.00491*** (−4.34) | −0.00251** (−2.42) | −0.00130 (−0.88) |
| PB | −0.000626 (−1.13) | 0.000395 (0.76) | −0.0000738 (−0.14) | 0.000355 (0.75) |
| STDEBT | −0.000108 (−0.04) | −0.0000816 (−0.03) | 0.000354 (0.17) | −0.00285 (−1.15) |
| CAPEX | 0.0175*** (2.65) | 0.0132** (2.19) | −0.00426 (−0.47) | −0.00442 (−0.47) |
| CASH | 0.00857* (1.88) | 0.0114** (2.43) | −0.000185 (−0.06) | −0.00273 (−0.86) |
| DIV | −0.00759 (−0.79) | −0.0275*** (−2.95) | −0.0200** (−2.05) | −0.0150 (−1.53) |
| NON_EX*CAPEX | −0.0198* (−1.98) | −0.0174** (−2.20) | 0.00727 (0.53) | 0.00295 (0.20) |
| Constant | 0.0846*** (4.25) | 0.0912*** (6.07) | 0.0567*** (4.12) | 0.0459** (2.32) |
| Year fixed | Yes | Yes | Yes | Yes |
| Firm fixed | Yes | Yes | Yes | Yes |
| Model fits | ||||
| Within R2 | 0.1088 | 0.1821 | 0.0742 | 0.1191 |
| Between R2 | 0.2428 | 0.2982 | 0.3649 | 0.1247 |
| Overall R2 | 0.2124 | 0.2412 | 0.2510 | 0.1443 |
| F-statistics | 3.27*** | 5.50*** | 3.38*** | 3.32*** |
| Obs | 501 | 685 | 764 | 675 |
| Dependent variable RISK2 | Overinvesting firms | Underinvesting firms | ||
|---|---|---|---|---|
| (Measure 1) | (Measure 2) | (Measure 1) | (Measure 2) | |
| NON_EX | 0.00449 (1.42) | 0.00697** (2.30) | 0.00760*** (2.90) | 0.0103*** (3.53) |
| FSIZE | −0.00476*** (−3.23) | −0.00491*** (−4.34) | −0.00251** (−2.42) | −0.00130 (−0.88) |
| PB | −0.000626 (−1.13) | 0.000395 (0.76) | −0.0000738 (−0.14) | 0.000355 (0.75) |
| STDEBT | −0.000108 (−0.04) | −0.0000816 (−0.03) | 0.000354 (0.17) | −0.00285 (−1.15) |
| CAPEX | 0.0175*** (2.65) | 0.0132** (2.19) | −0.00426 (−0.47) | −0.00442 (−0.47) |
| CASH | 0.00857* (1.88) | 0.0114** (2.43) | −0.000185 (−0.06) | −0.00273 (−0.86) |
| DIV | −0.00759 (−0.79) | −0.0275*** (−2.95) | −0.0200** (−2.05) | −0.0150 (−1.53) |
| NON_EX*CAPEX | −0.0198* (−1.98) | −0.0174** (−2.20) | 0.00727 (0.53) | 0.00295 (0.20) |
| Constant | 0.0846*** (4.25) | 0.0912*** (6.07) | 0.0567*** (4.12) | 0.0459** (2.32) |
| Year fixed | Yes | Yes | Yes | Yes |
| Firm fixed | Yes | Yes | Yes | Yes |
| Within | 0.1088 | 0.1821 | 0.0742 | 0.1191 |
| Between | 0.2428 | 0.2982 | 0.3649 | 0.1247 |
| Overall | 0.2124 | 0.2412 | 0.2510 | 0.1443 |
| 3.27*** | 5.50*** | 3.38*** | 3.32*** | |
| Obs | 501 | 685 | 764 | 675 |
Note(s): Variables are defined the same as in Table 2. Robust t-statistics adjusted for firm-level clustering are reported in parentheses. ***, ** and * denote significance at the 1%, 5% and 10% levels, respectively
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