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Table 3 Government control and the value of cash: Main results

From: Government control and the value of cash: evidence from listed firms in China

Variable Full sample Government-controlled Privately controlled Diff
(5)–(6)
(1) (2) (3) (4) (5) (6) (7)
Panel A: Regression results
ΔCASH 1.618***
(16.86)
1.727***
(16.27)
1.845***
(17.07)
1.884***
(16.39)
1.478***
(11.16)
1.913***
(13.86)
− 0.435**
ΔCASH × GOV   − 0.253***
(− 3.13)
− 0.268***
(− 3.30)
− 0.239***
(− 2.81)
   
ΔEBIT 1.338***
(16.88)
1.338***
(16.91)
1.430***
(17.58)
1.299***
(16.14)
1.146***
(11.79)
1.812***
(13.12)
− 0.666***
ΔNA 0.443***
(17.84)
0.443***
(17.80)
0.465***
(18.31)
0.451***
(16.86)
0.403***
(12.89)
0.538***
(12.65)
− 0.135***
ΔINT 1.053**
(1.97)
1.034*
(1.93)
1.055*
(1.90)
1.678***
(2.96)
0.793
(1.18)
0.791
(0.84)
0.002
ΔDIV 2.905***
(8.67)
2.916***
(8.68)
2.753***
(8.12)
2.414***
(7.08)
3.410***
(7.14)
2.049***
(4.30)
1.361**
CASH 0.130***
(4.97)
0.137***
(5.23)
0.169***
(6.21)
0.450***
(10.56)
0.227***
(6.11)
0.113***
(2.59)
0.114**
MLEV − 0.522***
(− 18.41)
− 0.511***
(− 17.91)
− 0.606***
(− 20.74)
− 1.160***
(− 18.85)
− 0.504***
(− 13.70)
− 0.737***
(− 14.31)
0.233***
NF − 0.034
(− 0.87)
− 0.037
(− 0.93)
− 0.022
(− 0.54)
− 0.025
(− 0.56)
− 0.050
(− 0.98)
0.002
(0.02)
− 0.052
ΔCASH × CASH − 1.472***
(− 6.60)
− 1.417***
(− 6.48)
− 1.396***
(− 6.42)
− 1.231***
(− 5.46)
− 1.153***
(− 3.78)
− 1.602***
(− 5.09)
0.449
ΔCASH × MLEV − 2.352***
(− 8.55)
− 2.277***
(− 8.36)
− 2.450***
(− 8.97)
− 2.424***
(− 8.34)
− 1.856***
(− 4.89)
− 3.156***
(− 7.75)
0.130**
GOV   − 0.018**
(− 2.49)
− 0.015**
(− 2.01)
− 0.020
(− 0.82)
   
Constant − 0.068***
(− 9.17)
− 0.060***
(− 7.22)
− 0.043*
(− 1.81)
0.014
(0.64)
− 0.093***
(− 2.82)
− 0.013
(− 0.38)
− 0.080*
Year effect No No Yes Yes Yes Yes  
Industry effect No No Yes No Yes Yes  
Firm effect No No No Yes No No  
R-squared 0.19 0.19 0.21 0.21 0.21 0.24  
Observations 19,340 19,340 19,340 19,340 10,134 9206  
  Full sample Government-controlled Privately controlled
(1) (2) (3)
Panel B: The marginal value of cash for the average firm
Sample means for cash value computation
 CASH 0.198 0.194 0.202
 MLEV 0.139 0.164 0.110
The marginal value of RMB 1.00 (average firm) 1.00 0.95 1.24
  1. The table reports the regression results of government control and the value of cash in Panel A and the marginal value of cash for the average firm in Panel B. The dependent variable is excess stock returns (r − RB). Δ indicates the change from the previous year. All variables except GOV and MLEV are deflated by the lagged market value of equity (MVE). The definitions of all variables are in Table 1. For all regressions, t-statistics (in parentheses) are based on robust standard errors clustered at the firm level
  2. ***, ** and * denote significance at the 1%, 5%, and 10% levels, respectively