Table 9 Insider ownership and default...

Table 9

Insider ownership and default risk: role of analyst coverage

	(1)	(2)	(3)	(4)	(5)	(6)
	High analyst coverage			Low analyst coverage
	DD	DD	DD	DD	DD	DD
DIR	−0.004***			−0.009*
DIR	(−8.743)			(−1.663)
CEOIR		−0.007***			−0.012**
CEOIR		(−10.168)			(−2.476)
EMPIR			−0.006**			−0.019**
EMPIR			(−1.965)			(−2.290)
LNS	0.156***	0.135***	0.169***	−0.048*	−0.061**	−0.041
LNS	(19.747)	(15.982)	(21.802)	(−1.776)	(−2.163)	(−1.539)
K/S	0.724***	0.724***	0.736***	0.904***	0.819***	0.905***
K/S	(17.369)	(16.239)	(17.651)	(7.894)	(6.882)	(7.930)
Y/S	5.006***	4.968***	4.946***	5.051***	4.994***	4.959***
Y/S	(27.357)	(25.386)	(26.990)	(11.591)	(11.003)	(11.357)
R&D/K	0.010**	0.008*	0.010**	−0.003	−0.013	−0.005
R&D/K	(2.438)	(1.892)	(2.439)	(−0.333)	(−1.228)	(−0.439)
RDUM	0.544	0.313	0.615
RDUM	(0.885)	(0.492)	(1.000)
I/K	−0.068**	−0.067**	−0.075***	−0.367***	−0.332***	−0.385***
I/K	(−2.576)	(−2.485)	(−2.831)	(−4.287)	(−3.836)	(−4.498)
ROA	0.035***	0.035***	0.033***	0.007	0.009*	0.006
ROA	(17.040)	(16.075)	(16.212)	(1.590)	(1.934)	(1.368)
LEVERAGE	−5.571***	−5.584***	−5.631***	−7.172***	−7.131***	−7.213***
LEVERAGE	(−84.995)	(−79.226)	(−86.282)	(−41.881)	(−39.051)	(−42.501)
Age	0.009	0.002	0.051***	0.179***	0.155***	0.197***
Age	(0.573)	(0.134)	(3.517)	(4.811)	(3.799)	(5.630)
Constant	2.485***	2.944***	2.121***	5.298***	5.452***	5.208***
Constant	(3.977)	(4.553)	(3.397)	(17.834)	(17.952)	(18.855)
Observations	30,415	26,631	30,445	5,684	4,962	5,690
R-squared	0.541	0.544	0.539	0.614	0.621	0.614
Firm fixed effect	Yes	Yes	Yes	Yes	Yes	Yes
Year effects	Yes	Yes	Yes	Yes	Yes	Yes
χ²	20.88	23.87	19.88
Prob > χ²	0.000	0.000	0.000

	(1)	(2)	(3)	(4)	(5)	(6)
	High analyst coverage			Low analyst coverage
	DD	DD	DD	DD	DD	DD
DIR	−0.004***			−0.009*
DIR	(−8.743)			(−1.663)
CEOIR		−0.007***			−0.012**
CEOIR		(−10.168)			(−2.476)
EMPIR			−0.006**			−0.019**
EMPIR			(−1.965)			(−2.290)
LNS	0.156***	0.135***	0.169***	−0.048*	−0.061**	−0.041
LNS	(19.747)	(15.982)	(21.802)	(−1.776)	(−2.163)	(−1.539)
K/S	0.724***	0.724***	0.736***	0.904***	0.819***	0.905***
K/S	(17.369)	(16.239)	(17.651)	(7.894)	(6.882)	(7.930)
Y/S	5.006***	4.968***	4.946***	5.051***	4.994***	4.959***
Y/S	(27.357)	(25.386)	(26.990)	(11.591)	(11.003)	(11.357)
R&D/K	0.010**	0.008*	0.010**	−0.003	−0.013	−0.005
R&D/K	(2.438)	(1.892)	(2.439)	(−0.333)	(−1.228)	(−0.439)
RDUM	0.544	0.313	0.615
RDUM	(0.885)	(0.492)	(1.000)
I/K	−0.068**	−0.067**	−0.075***	−0.367***	−0.332***	−0.385***
I/K	(−2.576)	(−2.485)	(−2.831)	(−4.287)	(−3.836)	(−4.498)
ROA	0.035***	0.035***	0.033***	0.007	0.009*	0.006
ROA	(17.040)	(16.075)	(16.212)	(1.590)	(1.934)	(1.368)
LEVERAGE	−5.571***	−5.584***	−5.631***	−7.172***	−7.131***	−7.213***
LEVERAGE	(−84.995)	(−79.226)	(−86.282)	(−41.881)	(−39.051)	(−42.501)
Age	0.009	0.002	0.051***	0.179***	0.155***	0.197***
Age	(0.573)	(0.134)	(3.517)	(4.811)	(3.799)	(5.630)
Constant	2.485***	2.944***	2.121***	5.298***	5.452***	5.208***
Constant	(3.977)	(4.553)	(3.397)	(17.834)	(17.952)	(18.855)
Observations	30,415	26,631	30,445	5,684	4,962	5,690
R-squared	0.541	0.544	0.539	0.614	0.621	0.614
Firm fixed effect	Yes	Yes	Yes	Yes	Yes	Yes
Year effects	Yes	Yes	Yes	Yes	Yes	Yes
χ²	20.88	23.87	19.88
Prob > χ²	0.000	0.000	0.000

Note(s): Table 9 represents regression results for analyzing the moderating impact of analyst coverage on the relationship between Insider ownership and firm default risk. High analyst coverage and Low analyst coverage indicate the below and above median value of analyst coverage level, adjacent to strong and weak external governance. Columns 1–3 show results for firms with higher analyst coverage and columns 4–6 show results for firms with less than median analyst coverage. T-statistics are in parentheses. Definitions of all variables are provided in Appendix. All regression control for industry and year fixed effects. Superscripts ***, ** and * denotes statistical significance at 1, 5 and 10% level, respectively

Source(s): Table created by the authors

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