Table 6 Earnings quality for private...

Table 6

Earnings quality for private subsidiary firms versus standalone firms (impact of parent’s size)

Variables	(1)	(2)
Variables	ABSDTA	ABSWCA
Subs	0.003	0.002
Subs	(0.002)	(0.003)
SubsParent_Size*	0.013***	0.019***
SubsParent_Size*	(0.004)	(0.006)
Capneed	0.000**	0.000***
Capneed	(0.000)	(0.000)
Size	−0.005***	−0.004***
Size	(0.000)	(0.000)
ROE	−0.000	−0.000
ROE	(0.000)	(0.000)
Loss	0.000***	0.001***
Loss	(0.000)	(0.000)
Std_ROA	0.000*	0.000
Std_ROA	(0.000)	(0.000)
Lev	−0.011***	−0.018***
Lev	(0.003)	(0.004)
Growth	0.020	0.007***
Growth	(0.002)	(0.007)
Inv	−0.038***	−0.01
Inv	(0.003)	(0.007)
Constant	0.127***	0.099***
Constant	(0.003)	(0.004)
Year FE	Yes	Yes
Industry FE	Yes	Yes
Observations	66,823	55,339
R-squared	0.080	0.110

Variables	(1)	(2)
Variables	ABSDTA	ABSWCA
Subs	0.003	0.002
Subs	(0.002)	(0.003)
Subs*Parent_Size	0.013***	0.019***
Subs*Parent_Size	(0.004)	(0.006)
Capneed	0.000**	0.000***
Capneed	(0.000)	(0.000)
Size	−0.005***	−0.004***
Size	(0.000)	(0.000)
ROE	−0.000	−0.000
ROE	(0.000)	(0.000)
Loss	0.000***	0.001***
Loss	(0.000)	(0.000)
Std_ROA	0.000*	0.000
Std_ROA	(0.000)	(0.000)
Lev	−0.011***	−0.018***
Lev	(0.003)	(0.004)
Growth	0.020	0.007***
Growth	(0.002)	(0.007)
Inv	−0.038***	−0.01
Inv	(0.003)	(0.007)
Constant	0.127***	0.099***
Constant	(0.003)	(0.004)
Year FE	Yes	Yes
Industry FE	Yes	Yes
Observations	66,823	55,339
R-squared	0.080	0.110

Note(s): Subs is an indicator variable for private subsidiary firms. Parent_Size is a binary indicator, 1 for parent companies with total assets in the upper quartile relative to subsidiaries, 0 otherwise. Please see Appendix 1 for detailed variable definitions. All continuous variables are winsorized at the 1st and 99th percentiles. The symbol ***, ** and * denote significance at 1, 5 and 10% levels, respectively. Robust standard errors (clustered at the firm level) are reported in the parentheses

Source(s): Table created by authors'

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