Table 4

Endogeneity of corruption

Formal debtInformal debtOwner's equityRetained earnings
[1][2][3][4]
Hausman test of endogeneity (j2)15.792 [0.000]9.363 [0.002]5.106 [0.024]17.237 [0.000]
Sargan x2 statistic (Over-identification test)0.074 [0.785]0.794 [0.373]0.364 [0.546]0.015 [0.902]
Anderson canon. corr. LM statistic (under-identification test)27.010 [0.000]22.900 [0.000]45.035 [0.000]85.173 [0.000]
Cragg–Donald Wald F-statistic (weak identification test)13.560 [0.000]11.485 [0.000]22.714 [0.000]43.406 [0.000]

Note(s): This table reports endogeneity tests of corruption on financing structure from four given specifications using 2SLS. P-values are in brackets. The instruments are included in all four specifications. Year and location effects are included. The number of observations is 5,252

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