Table 7 Relationship between ownership...

Table 7

Relationship between ownership and cash holding – dividend payout as an alternative measure of financial deficit

	CASH1				CASH2
	POLS			GMM	POLS			GMM
	Deficit	Surplus	All firms	All firms	Deficit	Surplus	All firms	All firms
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
L.CASH1				0.6905***
L.CASH1				[0.0337]
L.CASH2								0.5759***
L.CASH2								[0.0408]
FO	0.1502***	0.0372*	0.0467**	−0.0067	0.1765***	0.0399**	0.0473**	0.0046
FO	[0.0339]	[0.0215]	[0.0216]	[0.0091]	[0.0369]	[0.0193]	[0.0189]	[0.0105]
SO	0.0407***	0.0185	0.0232	0.0073*	0.0451***	0.0174	0.0210	0.0084*
SO	[0.0104]	[0.0150]	[0.0154]	[0.0059]	[0.0115]	[0.0141]	[0.0143]	[0.0079]
deficit_dum2			−0.0320***	−0.0070**			−0.0370***	−0.0079**
deficit_dum2			[0.0065]	[0.0029]			[0.0061]	[0.0038]
FO*deficit_dum2			0.0950***	0.0315*			0.1216***	0.0337*
FO*deficit_dum2			[0.0367]	[0.0164]			[0.0374]	[0.0192]
SO* deficit_dum2			0.0144	0.0016*			0.0215	0.0005*
SO* deficit_dum2			[0.0167]	[0.0069]			[0.0163]	[0.0091]
SIZE	−0.0082***	−0.0004	−0.0052***	0.0014***	−0.0108***	−0.0031	−0.0079***	0.0025***
SIZE	[0.0020]	[0.0029]	[0.0018]	[0.0002]	[0.0022]	[0.0024]	[0.0018]	[0.0003]
GROWTH	0.0029	−0.0325***	−0.0149***	−0.0069***	−0.0463***	−0.0811***	−0.0640***	−0.0403***
GROWTH	[0.0070]	[0.0078]	[0.0053]	[0.0024]	[0.0051]	[0.0061]	[0.0044]	[0.0034]
PROFIT	0.2059***	0.2581***	0.2211***	0.1010***	0.1383***	0.1797***	0.1463***	0.1295***
PROFIT	[0.0423]	[0.0507]	[0.0334]	[0.0160]	[0.0346]	[0.0412]	[0.0275]	[0.0164]
TDA	−0.1271***	−0.2011***	−0.1566***	−0.0626***	−0.1249***	−0.1806***	−0.1462***	−0.0754***
TDA	[0.0142]	[0.0225]	[0.0141]	[0.0084]	[0.0138]	[0.0204]	[0.0135]	[0.0109]
Constant	0.2927***	0.1510*	0.2630***		0.4029***	0.2664***	0.3778***
Constant	[0.0550]	[0.0772]	[0.0509]		[0.0594]	[0.0667]	[0.0495]
N	3,598	3,228	6,826	6,790	3,598	3,228	6,826	6,218
R²	0.1818	0.1867	0.2007		0.2121	0.2704	0.2433
AR²				0.2428				0.5367
Hansen				0.0579				0.1240

	CASH1				CASH2
	POLS			GMM	POLS			GMM
	Deficit	Surplus	All firms	All firms	Deficit	Surplus	All firms	All firms
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
L.CASH1				0.6905***
L.CASH1				[0.0337]
L.CASH2								0.5759***
L.CASH2								[0.0408]
FO	0.1502***	0.0372*	0.0467**	−0.0067	0.1765***	0.0399**	0.0473**	0.0046
FO	[0.0339]	[0.0215]	[0.0216]	[0.0091]	[0.0369]	[0.0193]	[0.0189]	[0.0105]
SO	0.0407***	0.0185	0.0232	0.0073*	0.0451***	0.0174	0.0210	0.0084*
SO	[0.0104]	[0.0150]	[0.0154]	[0.0059]	[0.0115]	[0.0141]	[0.0143]	[0.0079]
deficit_dum2			−0.0320***	−0.0070**			−0.0370***	−0.0079**
deficit_dum2			[0.0065]	[0.0029]			[0.0061]	[0.0038]
FO*deficit_dum2			0.0950***	0.0315*			0.1216***	0.0337*
FO*deficit_dum2			[0.0367]	[0.0164]			[0.0374]	[0.0192]
SO* deficit_dum2			0.0144	0.0016*			0.0215	0.0005*
SO* deficit_dum2			[0.0167]	[0.0069]			[0.0163]	[0.0091]
SIZE	−0.0082***	−0.0004	−0.0052***	0.0014***	−0.0108***	−0.0031	−0.0079***	0.0025***
SIZE	[0.0020]	[0.0029]	[0.0018]	[0.0002]	[0.0022]	[0.0024]	[0.0018]	[0.0003]
GROWTH	0.0029	−0.0325***	−0.0149***	−0.0069***	−0.0463***	−0.0811***	−0.0640***	−0.0403***
GROWTH	[0.0070]	[0.0078]	[0.0053]	[0.0024]	[0.0051]	[0.0061]	[0.0044]	[0.0034]
PROFIT	0.2059***	0.2581***	0.2211***	0.1010***	0.1383***	0.1797***	0.1463***	0.1295***
PROFIT	[0.0423]	[0.0507]	[0.0334]	[0.0160]	[0.0346]	[0.0412]	[0.0275]	[0.0164]
TDA	−0.1271***	−0.2011***	−0.1566***	−0.0626***	−0.1249***	−0.1806***	−0.1462***	−0.0754***
TDA	[0.0142]	[0.0225]	[0.0141]	[0.0084]	[0.0138]	[0.0204]	[0.0135]	[0.0109]
Constant	0.2927***	0.1510*	0.2630***		0.4029***	0.2664***	0.3778***
Constant	[0.0550]	[0.0772]	[0.0509]		[0.0594]	[0.0667]	[0.0495]
N	3,598	3,228	6,826	6,790	3,598	3,228	6,826	6,218
R²	0.1818	0.1867	0.2007		0.2121	0.2704	0.2433
AR²				0.2428				0.5367
Hansen				0.0579				0.1240

Note(s): The table presents the results of Equation (1) for two groups: deficit and surplus firms, and results with dummy variables for all firms. Standard errors are in parentheses. The superscripts *, ** and *** indicate significance at the 5, 1 and 0.1% levels, respectively

Source(s): Authors' own calculation

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