# Table 8 Regression results for state-owned enterprises for OC1%

One step Two steps
GMM1 GMM2 GMM1 GMM2
LEV(L1) 0.591*** 0.521*** 0.593*** 0.513***
−0.034 −0.018 −0.037 −0.024
PROF −0.028** −0.027** −0.025** −0.022**
−0.01 −0.01 −0.01 −0.01
SIZE 0.027*** 0.027*** 0.024*** 0.022**
−0.004 −0.004 −0.004 −0.004
NWC −0.006** −0.006** −0.013** −0.014**
−0.013 −0.013 −0.016 −0.016
OC 0.001 0.001 0.002 0.002
0 0 0 0
NDTS −0.255 −0.215 −0.214 −0.159
−0.107 −0.11 −0.126 −0.121
BSIZE 0.002 0.001 0.002 0.001
0 0 0 0
MTB 0.001 0.001 0.001 0.001
−0.001 −0.001 −0.001 −0.001
TR 0.001 0.002 0.001 0.002
0 0 0 0
INDLEV 0.346*** 0.375** 0.394*** 0.410***
−0.057 −0.057 −0.063 −0.06
LNDLIQ −0.080*** −0.085** −0.05*** −0.069**
−0.039 −0.038 −0.04 −0.038
INDHHI −0.011** −0.012** −0.005** −0.004**
−0.005 −0.005 −0.006 −0.006
GDP 0.003*** 0.003*** 0.002*** 0.002***
−0.001 −0.001 −0.001 −0.001
INFL −0.001** −0.001** −0.001** −0.001**
0 0 0 0
LR −0.007** −0.007** −0.002** −0.002**
−0.002 −0.002 −0.002 −0.002
Constant −0.489 −0.501 −0.487 −0.469
Sargen test 0.249 0.179 0.478 0.343
Abond test 0.125 0.239 0.614 0.398
Wild Chi2 1234.12 773.21 832.01 686.21
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