Table 2 Effects of liquidity on the...

Table 2

Effects of liquidity on the speed of leverage adjustment – baseline results

Variable	BLEV _t+1 (1)	MLEV _t+1 (2)
LEV	0.6460***	0.8330***
LEV	(0.000)	(0.000)
LIQ	−0.0001***	−0.0001***
LIQ	(−0.000)	(−0.000)
LIQ × LEV	0.0007***	0.0002***
LIQ × LEV	(0.000)	(0.001)
SIZE	0.0051***	0.0004
SIZE	(0.000)	(0.525)
TANG	0.0618***	0.0864***
TANG	(0.000)	(0.000)
MTB	0.0031***	0.0049***
MTB	(0.000)	(0.000)
PROF	0.0358***	0.0327***
PROF	(0.000)	(0.000)
DEP	0.2140***	−0.0422
DEP	(0.000)	(0.366)
RD	−0.0112	−0.0667***
RD	(0.621)	(0.000)
RDDUM	−0.0051*	−0.0077***
RDDUM	(0.061)	(0.001)
INDMED	0.0662***	−0.0818***
INDMED	(5.456)	(0.000)
Constant	−0.0308***	0.0843***
Constant	(0.004)	(0.000)
Year FE	Yes	Yes
Observations	14,925	14,925
Number of id	2,260	2,260
AR(2)	0.4406	0.6778
p-value Hansen test	0.3796	0.3121

Variable	BLEV _t+1 (1)	MLEV _t+1 (2)
LEV	0.6460***	0.8330***
LEV	(0.000)	(0.000)
LIQ	−0.0001***	−0.0001***
LIQ	(−0.000)	(−0.000)
LIQ × LEV	0.0007***	0.0002***
LIQ × LEV	(0.000)	(0.001)
SIZE	0.0051***	0.0004
SIZE	(0.000)	(0.525)
TANG	0.0618***	0.0864***
TANG	(0.000)	(0.000)
MTB	0.0031***	0.0049***
MTB	(0.000)	(0.000)
PROF	0.0358***	0.0327***
PROF	(0.000)	(0.000)
DEP	0.2140***	−0.0422
DEP	(0.000)	(0.366)
RD	−0.0112	−0.0667***
RD	(0.621)	(0.000)
RDDUM	−0.0051*	−0.0077***
RDDUM	(0.061)	(0.001)
INDMED	0.0662***	−0.0818***
INDMED	(5.456)	(0.000)
Constant	−0.0308***	0.0843***
Constant	(0.004)	(0.000)
Year FE	Yes	Yes
Observations	14,925	14,925
Number of id	2,260	2,260
AR(2)	0.4406	0.6778
p-value Hansen test	0.3796	0.3121

Note(s): This table reports the regression results for the effect of liquidity on the speed of adjustment using the two-step system GMM estimator for the baseline model. The variable definitions are contained in Appendix. ***, **, * indicate significance at the 1, 5, and 10% levels, respectively. The p-values are in parenthesis

Source(s): The table is created by authors

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