Regression results when audit cost is proxied by audit fees
| (1) | (2) | (3) | |
|---|---|---|---|
| Variables | lnAudfees | lnAudfees | lnAudfees |
| L.lnAudfees | 0.531*** | 0.545*** | 0.518*** |
| (0.196) | (0.165) | (0.136) | |
| CDSTrade | 0.185*** | 0.201*** | −0.194 |
| (0.0535) | (0.0690) | (0.139) | |
| protection | −0.369 | −0.128 | |
| (0.854) | (0.398) | ||
| cdsprot | 0.439*** | ||
| (0.154) | |||
| WSPTB | −0.00118*** | −0.00136** | −0.00137*** |
| (0.000365) | (0.000545) | (0.000452) | |
| lnTA | 0.311** | 0.286** | 0.311*** |
| (0.147) | (0.136) | (0.110) | |
| ROA | 0.364** | 0.415** | 0.347* |
| (0.158) | (0.196) | (0.183) | |
| InvRec2TA | −0.200 | −0.349 | −0.317 |
| (0.275) | (0.405) | (0.361) | |
| FS2TSales | 0.00388*** | 0.00323** | 0.00339** |
| (0.00140) | (0.00126) | (0.00147) | |
| STCredMon | 0.0161 | 0.0110 | 0.0166 |
| (0.0475) | (0.0515) | (0.0490) | |
| Lev | 0.450** | 0.492** | 0.425* |
| (0.200) | (0.248) | (0.234) | |
| OCF2TA | −0.335*** | −0.353*** | −0.347*** |
| (0.114) | (0.125) | (0.118) | |
| big_5 | 0.308 | 0.305 | 0.417 |
| (0.352) | (0.437) | (0.475) | |
| economyclass | 0.0941 | 0.374 | 0.359 |
| (0.731) | (0.824) | (0.773) | |
| Constant | −2.594* | −2.304* | −2.771** |
| (1.354) | (1.395) | (1.210) | |
| AR(1) | 0.001 | 0.000 | 0.000 |
| AR(2) | 0.104 | 0.118 | 0.103 |
| Hansen OIR | 0.170 | 0.244 | 0.257 |
| DHT for Instruments | |||
| GMM Instruments for levels | |||
| H excluding group | 0.139 | 0.222 | 0.218 |
| Diff(null, H = exogenous) | 0.961 | 0.458 | 0.821 |
| Fisher | 1002.29*** | 950.53*** | 1506.21*** |
| Instruments | 42 | 37 | 42 |
| Observations | 4,773 | 4,668 | 4,668 |
| Number of Firms | 344 | 343 | 343 |
| (1) | (2) | (3) | |
|---|---|---|---|
| Variables | lnAudfees | lnAudfees | lnAudfees |
| L.lnAudfees | 0.531*** | 0.545*** | 0.518*** |
| (0.196) | (0.165) | (0.136) | |
| CDSTrade | 0.185*** | 0.201*** | −0.194 |
| (0.0535) | (0.0690) | (0.139) | |
| protection | −0.369 | −0.128 | |
| (0.854) | (0.398) | ||
| WSPTB | −0.00118*** | −0.00136** | −0.00137*** |
| (0.000365) | (0.000545) | (0.000452) | |
| lnTA | 0.311** | 0.286** | 0.311*** |
| (0.147) | (0.136) | (0.110) | |
| ROA | 0.364** | 0.415** | 0.347* |
| (0.158) | (0.196) | (0.183) | |
| InvRec2TA | −0.200 | −0.349 | −0.317 |
| (0.275) | (0.405) | (0.361) | |
| FS2TSales | 0.00388*** | 0.00323** | 0.00339** |
| (0.00140) | (0.00126) | (0.00147) | |
| STCredMon | 0.0161 | 0.0110 | 0.0166 |
| (0.0475) | (0.0515) | (0.0490) | |
| Lev | 0.450** | 0.492** | 0.425* |
| (0.200) | (0.248) | (0.234) | |
| OCF2TA | −0.335*** | −0.353*** | −0.347*** |
| (0.114) | (0.125) | (0.118) | |
| big_5 | 0.308 | 0.305 | 0.417 |
| (0.352) | (0.437) | (0.475) | |
| economyclass | 0.0941 | 0.374 | 0.359 |
| (0.731) | (0.824) | (0.773) | |
| Constant | −2.594* | −2.304* | −2.771** |
| (1.354) | (1.395) | (1.210) | |
| AR(1) | 0.001 | 0.000 | 0.000 |
| AR(2) | 0.104 | 0.118 | 0.103 |
| Hansen OIR | 0.170 | 0.244 | 0.257 |
| DHT for Instruments | |||
| GMM Instruments for levels | |||
| H excluding group | 0.139 | 0.222 | 0.218 |
| Diff(null, H = exogenous) | 0.961 | 0.458 | 0.821 |
| Fisher | 1002.29*** | 950.53*** | 1506.21*** |
| Instruments | 42 | 37 | 42 |
| Observations | 4,773 | 4,668 | 4,668 |
| Number of Firms | 344 | 343 | 343 |
Note(s): Variable names are as defined in Table 1
Source(s): By Author based on data taken from World scope, Markit, and World Bank
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