Regression results when audit cost is proxied by the ratio of audit fees to sales
| (4) | (5) | (6) | |
|---|---|---|---|
| Variables | lnAudF2Sales | lnAudF2Sales | lnAudF2Sales |
| L.lnAudF2Sales | 0.265*** | 0.276** | 0.278** |
| (0.0856) | (0.127) | (0.127) | |
| CDSTrade | 0.220*** | 0.212*** | −0.745 |
| (0.0848) | (0.0716) | (1.084) | |
| protection | −0.529 | −0.561 | |
| (1.535) | (1.407) | ||
| cdsprot | 1.062 | ||
| (1.198) | |||
| WSPTB | −0.00123** | −0.00160** | −0.00176** |
| (0.000516) | (0.000818) | (0.000832) | |
| lnTA | −0.142** | −0.162*** | −0.167*** |
| (0.0555) | (0.0534) | (0.0546) | |
| ROA | 0.478* | 0.300 | 0.279 |
| (0.285) | (0.346) | (0.341) | |
| InvRec2TA | −1.286*** | −1.512*** | −1.643*** |
| (0.337) | (0.587) | (0.529) | |
| FS2TSales | 0.0213*** | 0.0204*** | 0.0198*** |
| (0.00677) | (0.00596) | (0.00654) | |
| STCredMon | −0.00611 | 0.0173 | 0.00436 |
| (0.0597) | (0.0833) | (0.0733) | |
| Lev | 0.633* | 0.412 | 0.389 |
| (0.364) | (0.410) | (0.412) | |
| OCF2TA | −0.651*** | −0.660*** | −0.701*** |
| (0.177) | (0.173) | (0.181) | |
| big_5 | 0.476 | 0.548 | 0.576 |
| (0.511) | (1.126) | (1.047) | |
| economyclass | −0.501 | −0.300 | −0.500 |
| (1.200) | (1.068) | (0.987) | |
| Constant | −3.715*** | −3.137* | −2.859* |
| (1.210) | (1.615) | (1.631) | |
| AR(1) | 0.000 | 0.001 | 0.001 |
| AR(2) | 0.209 | 0.208 | 0.198 |
| Hansen OIR | 0.733 | 0.702 | 0.794 |
| DHT for Instruments | |||
| GMM Instruments for levels | |||
| H excluding group | 0.703 | 0.814 | 0.797 |
| Diff(null, H = exogenous) | 0.523 | 0.104 | 0.339 |
| Fisher | 44992.09*** | 42903.70*** | 43334.86*** |
| Instruments | 34 | 32 | 33 |
| Observations | 4,773 | 4,668 | 4,668 |
| Number of Firms | 344 | 343 | 343 |
| (4) | (5) | (6) | |
|---|---|---|---|
| Variables | lnAudF2Sales | lnAudF2Sales | lnAudF2Sales |
| L.lnAudF2Sales | 0.265*** | 0.276** | 0.278** |
| (0.0856) | (0.127) | (0.127) | |
| CDSTrade | 0.220*** | 0.212*** | −0.745 |
| (0.0848) | (0.0716) | (1.084) | |
| protection | −0.529 | −0.561 | |
| (1.535) | (1.407) | ||
| WSPTB | −0.00123** | −0.00160** | −0.00176** |
| (0.000516) | (0.000818) | (0.000832) | |
| lnTA | −0.142** | −0.162*** | −0.167*** |
| (0.0555) | (0.0534) | (0.0546) | |
| ROA | 0.478* | 0.300 | 0.279 |
| (0.285) | (0.346) | (0.341) | |
| InvRec2TA | −1.286*** | −1.512*** | −1.643*** |
| (0.337) | (0.587) | (0.529) | |
| FS2TSales | 0.0213*** | 0.0204*** | 0.0198*** |
| (0.00677) | (0.00596) | (0.00654) | |
| STCredMon | −0.00611 | 0.0173 | 0.00436 |
| (0.0597) | (0.0833) | (0.0733) | |
| Lev | 0.633* | 0.412 | 0.389 |
| (0.364) | (0.410) | (0.412) | |
| OCF2TA | −0.651*** | −0.660*** | −0.701*** |
| (0.177) | (0.173) | (0.181) | |
| big_5 | 0.476 | 0.548 | 0.576 |
| (0.511) | (1.126) | (1.047) | |
| economyclass | −0.501 | −0.300 | −0.500 |
| (1.200) | (1.068) | (0.987) | |
| Constant | −3.715*** | −3.137* | −2.859* |
| (1.210) | (1.615) | (1.631) | |
| AR(1) | 0.000 | 0.001 | 0.001 |
| AR(2) | 0.209 | 0.208 | 0.198 |
| Hansen OIR | 0.733 | 0.702 | 0.794 |
| DHT for Instruments | |||
| GMM Instruments for levels | |||
| H excluding group | 0.703 | 0.814 | 0.797 |
| Diff(null, H = exogenous) | 0.523 | 0.104 | 0.339 |
| Fisher | 44992.09*** | 42903.70*** | 43334.86*** |
| Instruments | 34 | 32 | 33 |
| 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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