086 0059 0122 0074 0383 0434 0552 1008 0524 000 019

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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 * M-B ratio Crony * Fixed asset ratio Crony * Total liabilities /asset Crony * S.D. (sales 1991-95) Log (asset) M-B ratio Fixed asset ratio Total liabilities /asset S.D. (sales 1991-95) Banker on Board Banker as executives Banker as non executives Intercept -0.971∗∗ (0.506) -0.874∗∗∗ (0.283) -0.515 (0.503) F-statistic Prob (F-statistic) Adjusted R-squared 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. M-B 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 91-95) is the S.D. of the percentage changes in sales over the period 1991-1995. 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) M-B ratio Fixed asset ratio Total liabilities /asset S.D. (sales 1991-95) 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 * M-B ratio Crony * Fixed asset ratio Crony * Total liabilities /asset Crony * S.D. (sales 1991-95) 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 long-term 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...
View Full Document

Ask a homework question - tutors are online