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Table 4 Addressing endogenous concern

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

  Lagged government control PSM Change of ownership
(1) (2) (3)
ΔCASH 1.892***
(17.18)
1.770***
(10.04)
1.291***
(4.67)
ΔCASH × GOV − 0.285***
(− 3.37)
− 0.403***
(− 3.51)
 
ΔCASH × Transfer    0.639***
(3.24)
ΔEBIT 1.451***
(17.00)
1.348***
(10.72)
1.074***
(5.63)
ΔNA 0.471***
(17.98)
0.430***
(9.86)
0.498***
(6.92)
ΔINT 0.983*
(1.72)
0.324
(0.31)
− 0.647
(− 0.38)
ΔDIV 2.867***
(7.98)
2.426***
(3.85)
2.275**
(2.30)
CASH 0.181***
(6.39)
0.059
(1.30)
0.135
(1.57)
MLEV − 0.616***
(− 20.05)
− 0.555***
(− 11.59)
− 0.683***
(− 7.69)
NF − 0.024
(− 0.59)
0.041
(0.64)
0.010
(0.08)
ΔCASH × CASH − 1.436***
(− 6.47)
− 1.292***
(− 3.99)
− 2.029***
(− 4.40)
ΔCASH × MLEV − 2.450***
(− 8.52)
− 1.856***
(− 3.81)
− 2.582***
(− 3.48)
GOV − 0.016**
(− 1.98)
− 0.042***
(− 3.88)
 
Transfer    0.048**
(2.03)
Constant − 0.021
(− 0.81)
− 0.078**
(− 2.44)
− 0.045*
(− 1.66)
Year effect Yes Yes Yes
Industry effect Yes Yes Yes
R-squared 0.22 0.27 0.25
Observations 18,285 19,594 2208
  1. The table reports the results of addressing endogeneity concerns. The dependent variable is excess stock returns (r − RB). Δ indicates the change from the previous year. All variables except GOV, Transfer, 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