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Table 3 Regression output for overall firms

From: How do Chinese firms adjust their financial leverage: an empirical investigation using multiple GMM models

  OLS GLS fixed-effects GMM1 GMM2
LEV(L1)    0.675*** 0.70***
   −0.0204 −0.0335
PROF −0.0331*** −0.023*** −0.048** −0.05**
−0.0094 −0.0086 −0.0192 −0.0203
SIZE 0.0434*** 0.0453*** 0.026*** 0.02***
−0.0016 −0.0022 −0.0044 −0.0048
NWC −0.0402*** −0.0246** 0.0029 0.0038
−0.0065 −0.0079 −0.0165 −0.017
OC5% −0.0036*** −0.0012** −0.0024 −0.0024
−0.0008 −0.0009 −0.0014 −0.0015
NDTS −0.0066 −0.1055 −0.2677** −0.27**
−0.0584 −0.0733 −0.1539 −0.1705
BSIZE 0.0004* 0.0008** 0.0003 0.0005
−0.0002 −0.0003 −0.0003 −0.0003
MTB 0.0059*** 0.0017 0.0036** 0.0025*
−0.0012 −0.0011 −0.0014 −0.0015
TR 0.0019** 0.0015** 0.0001 0.0001
−0.0007 −0.0006 −0.0006 −0.0006
INDLEV 0.6364*** 0.5375*** 0.365*** 0.37***
−0.0222 −0.0295 −0.0631 −0.0657
LNDLIQ −0.0048 −0.0508* −0.0454 −0.0284
−0.0103 −0.0202 −0.0325 −0.0347
INDHHI −0.0540*** −0.0394** −0.018** −0.01**
−0.0027 −0.0037 −0.0061 −0.0064
GDP 0.0003 0.0022*** 0.003*** 0.003***
−0.0007 −0.0006 −0.0007 −0.0007
INFL −0.0008 −0.0008** −0.0001 −0.0001
−0.0005 −0.0004 −0.0004 −0.0004
LR −0.0019 −0.006*** −0.009*** −0.009***
−0.0021 −0.0018 −0.002 −0.0021
Constant −0.5308 −0.6217 −0.4935 −0.49
Adj R 0.3015 0.2608   
F Stat 120.73 94.62   
Abond test    0.7901  
 Wald chi2    2092.9** 593.0***
Sargan test    0.531 0.375
Hausman test   47***   
  1. Standard errors are given in parentheses
  2. *, **, ***Show significance at 90, 95, and 99%, respectively
  3. LEV is the leverage measured through the ratio of debt to asset. PROF is the profitability measured through the ratio of return on equity. SIZE is the firm’s size measured through natural log of firm’s asset. NWC is the networking capital used as a proxy for a firm’s liquidity. OC5% is the ownership concentration. NDTS is thenon-debt tax shield measured through the proportion of the sum of amortization and depreciation to total assets. BSIZE is the board size measured through number of directors on a firm’s board of directors. MTB is the market to book ratio used as a proxy for growth oppurtunities. TR is the tax to earnings ratio used a proxy for corporate tax rate, and it is measured as proportion of taxes to earnings before taxes. INDLEV is the median industry leverage as median of total debt to total asset ratios of involved companies in an industry. INDLIQ is the industry liquidity. INDHHI is Herfindahl–Hirschman Index (HHI) as the sum of the squares of a firm’s sales to an industry’s total sales. GDP is the real annual gross domestic product. INFL is the inflation rate in China. LR is the lending rate in China