Unformatted text preview: tandard errors are shown in parentheses. ∗ , ∗∗ , ∗∗∗ indicate
signiﬁcance at the 10, 5 and 1 percent levels, respectively.
Independent Variable (1) (2) (3) Crony * Log (asset) 0.002
(0.039)
0.034
(0.046)
0.138
(0.163)
0.090
(0.174)
0.014
(0.022)
0.230∗
(0.562)
0.065
(0.037)
0.022∗∗
(0.033)
0.407
(0.163)
0.062
(0.126)
0.230
(0.562) 0.005
(0.030)
0.035
(0.066)
0.215
(0.151)
0.235
(0.235)
0.019
(0.043)
0.059∗∗∗
(0.020)
0.007
(0.030)
0.396∗∗∗
(0.111)
0.095
(0.108)
0.041
(0.035) 0.027
(0.041)
0.003
(0.050)
0.020
(0.151)
0.037
(0.183)
0.004
(0.036)
0.039
(0.037)
0.000
(0.028)
0.275∗
(0.159)
0.054
(0.124)
0.019
(0.024) 0.401
(0.444) 0.320
(0.573) Crony * MB ratio
Crony * Fixed asset ratio
Crony * Total liabilities /asset
Crony * S.D. (sales 199195)
Log (asset)
MB ratio
Fixed asset ratio
Total liabilities /asset
S.D. (sales 199195)
Banker on Board
Banker as executives
Banker as non executives
Intercept 0.971∗∗
(0.506) 0.874∗∗∗
(0.283) 0.515
(0.503) Fstatistic
Prob (Fstatistic)
Adjusted Rsquared 6.840
0.00
0.351 6.510
0.00
0.364 6.610
0.00
0.355 36 Table 10: The Determinants of Board Connections
The estimation method is Probit. The coeﬃcients presented are the marginal eﬀects of a one
unit change from the mean of each independent variable on the probability of having a board
connection with banks. The independent variable is one if the ﬁrm has at least one member
from the board of banks acting as director or top executive of the ﬁrm, has at least one person
on its board sitting on those of banks in 1996, and zero otherwise. Mean of the dependent
variable is 0.69. MB ratio is the ratio of the market to the book values of total assets. Fixed
asset ratio is the ratio of net ﬁxed assets to total assets. Inﬂuential families with banks indicates
if the the ﬁrm belongs to one of the 60 largest business groups and its major shareholder also
owns at least one bank and ﬁnance company. Inﬂuential families without banks indicates if
the ﬁrm belongs to one of the 60 largest business groups and its major shareholder does not
own bank. S.D. (sales 9195) is the S.D. of the percentage changes in sales over the period
19911995. The regression method is the OLS. Each speciﬁcation includes a set of 21 industry
dummies but the results are suppressed. Robust standard errors are shown in parentheses. ∗ ,
∗∗ , ∗∗∗ indicate signiﬁcance at the 10, 5 and 1 percent levels, respectively.
Independent Variable (1) (2) (3) (4) (5) Log (asset) 0.163 ∗∗∗
(0.036)
0.024
(0.051)
0.130
(0.168)
0.367 ∗
(0.212)
0.049
(0.062) 0.134 ∗∗∗
(0.036)
0.035
(0.049)
0.126
(0.167)
0.280
(0.206)
0.043
(0.068)
0.266 ∗∗∗
(0.053)
0.277 ∗∗∗
(0.043) 0.170 ∗∗∗
(0.051)
0.026
(0.045)
0.022
(0.147)
0.416 ∗∗
(0.206)
0.022
(0.062)
0.988 ∗∗∗
(0.030) 0.135 ∗∗∗
(0.042)
0.031
(0.054)
0.178
(0.187)
0.290
(0.231)
0.050
(0.079)
0.310 ∗∗∗
(0.064) 0.171 ∗∗∗
(0.057)
0.036
(0.050)
0.083
(0.170)
0.393 ∗
(0.226)
0.012
(0.076)
0.994 ∗∗∗
(0.018) MB ratio
Fixed asset ratio
Total liabilities /asset
S.D. (sales 199195)
Inﬂuential families without banks
Inﬂuential families with banks 0.238 ∗∗∗
(0.079)
0.052
(0.110)
0.156
(0.341)
0.516
(0.504)
0.996
(0.463) Crony * Log (asset)
Crony * MB ratio
Crony * Fixed asset ratio
Crony * Total liabilities /asset
Crony * S.D. (sales 199195) Prob > chi2
Pseudo R2
N 0.00
0.150
270 0.00
0.22
270 37 0.00
0.22
270 0.237 ∗∗∗
(0.086)
0.059
(0.122)
0.074
(0.383)
0.434
(0.552)
1.008
(0.524) 0.00
0.19
239 0.00
0.22
239 Table 11: Board Connections: Robustness Tests
The regression is based on a sample of 239 publicly traded ﬁrms in 1996. The sample ﬁrms are
ﬁrms in which the controlling shareholders own ﬁnancial institutions. The dependent variable is
longterm loans divided by total debt. Board connections indicates whether there exits at least
one member from the board of banks in the ﬁrm board. Bankers as executives and Bankers as
non executives are dummy variables, taking the value of 1 if there exits at least...
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 Fall '13
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