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Table 9 Regression results for non-state-owned enterprises for OC1%

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

  One step Two steps
GMM1 GMM2 GMM1 GMM2
LEV(L1) 0.692*** 0.653*** 0.673*** 0.685***
−0.036 −0.018 −0.042 −0.025
PROF −0.094** −0.088** −0.074** −0.067**
−0.016 −0.015 −0.025 −0.024
SIZE 0.042** 0.042** 0.026** 0.032**
−0.004 −0.004 −0.007 −0.006
NWC −0.030** −0.032** −0.005** −0.020**
−0.016 −0.015 −0.019 −0.018
OC 0.001 0.001 0.001 0.001
0 0 0 0
NDTS −0.163 −0.097 −0.196 −0.052
−0.127 −0.123 −0.167 −0.149
BSIZE 0.001 0.001 0.001 0.001
0 0 0 0
MTB 0.001 0.001 −0.001 −0.001
−0.002 −0.002 −0.002 −0.001
TR 0 0 0 0
−0.001 −0.001 0 0
INDLEV 0.334*** 0.279*** 0.317*** 0.241***
−0.055 −0.051 −0.06 −0.055
LNDLIQ −0.031** −0.034** −0.028** −0.023**
−0.041 −0.036 −0.032 −0.028
INDHHI −0.024** −0.024** −0.016** −0.020**
−0.007 −0.007 −0.008 −0.007
GDP 0.004*** 0.004*** 0.002*** 0.003**
−0.001 −0.001 −0.001 −0.001
INFL −0.001** −0.008** −0.005** −0.009**
0 0 0 0
LR −0.011** −0.011** −0.015** −0.006**
−0.002 −0.002 −0.002 −0.002
Constant −0.712 −0.703 −0.674 −0.516
Abond test 0.217 0.871 0.478 0.357
Sargan test 0.147 0.123 0.136 0.138
Wald Chi2 1132.23 1234.53 1478.32 1725.103
  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