Testing the income smoothing hypothesis (Two-Step System GMM)
| (1) | (2) | (3) | (4) | (5) | (6) | |
|---|---|---|---|---|---|---|
| LLP | LLP | LLP | LLP | LLP | LLP | |
| Coefficient (t-statistic) | Coefficient (t-statistic) | Coefficient (t-statistic) | Coefficient (t-statistic) | Coefficient (t-statistic) | Coefficient (t-statistic) | |
| LLPt-1 | −0.107 (−1.10) | −0.012 (−1.52) | −0.011 (−1.41) | −0.012 (−1.53) | −0.007 (−0.98) | 1.100*** (15.99) |
| EBPT | 0.026 (1.30) | −0.206*** (−4.41) | −0.202*** (−4.30) | −0.198*** (−3.93) | −0.197** (2.03) | −0.001 (−0.86) |
| NPL | 0.009 (1.04) | 0.021*** (2.78) | 0.022*** (2.93) | 0.021*** (2.86) | 0.029** (2.49) | 0.012** (2.10) |
| CP | 0.014 (0.82) | 0.003 (0.19) | 0.005 (0.28) | 0.004 (0.23) | 0.001 (0.03) | 0.0001 (0.016) |
| SIZE | 0.222 (0.80) | 0.255** (2.49) | 0.236** (2.30) | 0.237** (2.24) | 0.269** (2.03) | −0.064 (−1.11) |
| GDPG | 0.065 (1.32) | 0.119*** (3.38) | 0.133*** (2.74) | 0.146*** (4.25) | 0.104** (2.31) | 0.0116 (0.50) |
| LN | −1.363** (−2.56) | −0.884** (−2.44) | ||||
| BN | −0.245 (−1.18) | 0.004 (0.02) | ||||
| CN | −0.001 (−0.18) | −0.001 (−0.29) | ||||
| HS | 0.739* (1.73) | 0.285 (1.39) | ||||
| Constant | −0.683 (−0.25) | −1.105 (−1.04) | −1.349 (−1.30) | −1.249 (−1.06) | −2.152* (−1.66) | 0.791 (1.124) |
| Observations | 988 | 948 | 987 | 969 | 714 | 704 |
| AR (1)p | 0.0332 | 0.0305 | 0.0220 | 0.0295 | 0.0835 | 0.007 |
| AR (2)p | 0.678 | 0.0496 | 0.0767 | 0.0736 | 0.158 | 0.676 |
| Hansen(p) | 0.00637 | 0.0366 | 0.0274 | 0.0389 | 0.0138 | 0.325 |
| Sargan(p) | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.00001 |
| (1) | (2) | (3) | (4) | (5) | (6) | |
|---|---|---|---|---|---|---|
| LLP | LLP | LLP | LLP | LLP | LLP | |
| Coefficient (t-statistic) | Coefficient (t-statistic) | Coefficient (t-statistic) | Coefficient (t-statistic) | Coefficient (t-statistic) | Coefficient (t-statistic) | |
| LLPt-1 | −0.107 (−1.10) | −0.012 (−1.52) | −0.011 (−1.41) | −0.012 (−1.53) | −0.007 (−0.98) | 1.100*** (15.99) |
| EBPT | 0.026 (1.30) | −0.206*** (−4.41) | −0.202*** (−4.30) | −0.198*** (−3.93) | −0.197** (2.03) | −0.001 (−0.86) |
| NPL | 0.009 (1.04) | 0.021*** (2.78) | 0.022*** (2.93) | 0.021*** (2.86) | 0.029** (2.49) | 0.012** (2.10) |
| CP | 0.014 (0.82) | 0.003 (0.19) | 0.005 (0.28) | 0.004 (0.23) | 0.001 (0.03) | 0.0001 (0.016) |
| SIZE | 0.222 (0.80) | 0.255** (2.49) | 0.236** (2.30) | 0.237** (2.24) | 0.269** (2.03) | −0.064 (−1.11) |
| GDPG | 0.065 (1.32) | 0.119*** (3.38) | 0.133*** (2.74) | 0.146*** (4.25) | 0.104** (2.31) | 0.0116 (0.50) |
| LN | −1.363** (−2.56) | −0.884** (−2.44) | ||||
| BN | −0.245 (−1.18) | 0.004 (0.02) | ||||
| CN | −0.001 (−0.18) | −0.001 (−0.29) | ||||
| HS | 0.739* (1.73) | 0.285 (1.39) | ||||
| Constant | −0.683 (−0.25) | −1.105 (−1.04) | −1.349 (−1.30) | −1.249 (−1.06) | −2.152* (−1.66) | 0.791 (1.124) |
| Observations | 988 | 948 | 987 | 969 | 714 | 704 |
| AR (1)p | 0.0332 | 0.0305 | 0.0220 | 0.0295 | 0.0835 | 0.007 |
| AR (2)p | 0.678 | 0.0496 | 0.0767 | 0.0736 | 0.158 | 0.676 |
| Hansen(p) | 0.00637 | 0.0366 | 0.0274 | 0.0389 | 0.0138 | 0.325 |
| Sargan(p) | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.00001 |
Source(s): Authors’ computation
Sharing content requires targeting cookies to be enabled. Please update your cookie preferences to use this feature.