Unformatted text preview: major shareholder also owns at least one ﬁnancial institution. Inﬂuential families without banks
indicates if the ﬁrm’s major shareholder does not own a ﬁnancial institution. 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. S.D. (sales 9195) is the S.D. of the percentage changes in sales
over the period 19911995. In column (1), (2), and (3), the ﬁrm characteristics are interacted
with Inﬂuential families, Inﬂuential families with banks, and Inﬂuential families without banks,
respectively. 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) Crony * Log (asset) 0.002
(0.030)
0.016
(0.049)
0.343∗∗
(0.151)
0.253
(0.221)
0.035
(0.041)
0.016
(0.428) 0.029
(0.030)
0.257∗∗∗
(0.092)
0.133
(0.179)
0.845∗∗∗
(0.323)
0.094
(0.077) 0.003
(0.034)
0.052
(0.052)
0.363
(0.183)
0.063
(0.243)
0.012
(0.046) Crony * MB ratio
Crony * Fixed asset ratio
Crony * Total liabilities /asset
Crony * S.D. (sales 199195)
Inﬂuential families
Inﬂuential families with banks 0.305
(0.408) Inﬂuential families without banks
0.058∗∗∗
(0.022)
0.007
(0.028)
0.405∗∗∗
(0.135)
0.019
(0.108)
0.044
(0.030)
0.785∗∗
(0.323) MB ratio
Fixed asset ratio
Total liabilities /asset
S.D. (sales 199195)
Intercept Fstatistic
Prob (Fstatistic)
Rsquared 35 0.069∗∗∗
(0.017)
0.010
(0.025)
0.283∗∗
(0.116)
0.052
(0.097)
0.028
(0.019)
0.858∗∗∗
(0.257) 6.530
0.000
0.375 Log (asset) 0.077
(0.487)
0.066∗∗∗
(0.017)
0.021
(0.028)
0.386∗∗∗
(0.122)
0.014
(0.109)
0.012
(0.037)
0.890∗∗∗
(0.237) 6.45
0
0.376 6.83
0.000
0.3686 Table 9: The Interation between Crony Variable: Board Connection Regression
The regression is based on a sample of 270 publicly traded ﬁrms in 1996. The dependent variable
is longterm loans divided by total debt. Board connections indicates whether if 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 one member
from the board of banks acting as top executive and non executive of the ﬁrm, respectively.
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. S.D. (sales 9195) is the S.D. of the percentage changes
in sales over the period 19911995. In column (1), (2), and (3), the ﬁrm characteristics are
interacted with Board connections, Bankers as executives and Bankers as non executives. The
regression method is the OLS. Each speciﬁcation includes a set of 21 industry dummies but
the results are suppressed. Robust s...
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 Fall '13
 Debt

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