S firms the second to last column shows the co

This preview shows page 14 - 17 out of 18 pages.

are significantly different from U.S. firms. The second-to-last column shows the co- efficients that are significantly different from all the other emerging market firms, and the results suggest that three of the coefficients for Korea are significantly different, which is reported as 4-3 in the final column. The last column suggests that except for Malaysia and Pakistan, these emerging market firms seem to have more in common with each other than with U.S. firms. However, heterogeneity is
Image of page 14
384 The Journal of Financial Research TABLE 6. The Significance of Interactive Dummy Variables Included in Regressions. Variables U.S. All + U.S. All U.S. Difference a Korea Busrisk 1 . 8 2 . 8 ∗∗ 1 . 5 4-3 Size 3 . 9 ∗∗ 1 . 1 2 . 7 ∗∗ Tangibility 2 . 5 ∗∗ 1 . 1 5 . 5 ∗∗ ROE 3 . 3 ∗∗ 2 . 1 ∗∗ 1 . 7 M/B 3 . 1 ∗∗ 0 . 3 0 . 2 Debt ratio 0 . 8 1 . 7 4 . 2 ∗∗ India Busrisk 1 . 6 2 . 5 ∗∗ 0 . 4 4-1 Size 2 . 6 ∗∗ 1 . 2 2 . 0 ∗∗ Tangibility 8 . 9 ∗∗ 2 . 0 ∗∗ 1 . 4 ROE 5 . 9 ∗∗ 0 . 8 0 . 9 M/B 3 . 5 ∗∗ 0 . 3 0 . 6 Debt ratio 7 . 2 2 . 0 ∗∗ 0 . 1 Malaysia Busrisk 1 . 7 5 . 9 ∗∗ 2 . 6 ∗∗ 3-4 Size 2 . 8 ∗∗ 3 . 5 ∗∗ 6 . 4 ∗∗ Tangibility 2 . 9 ∗∗ 1 . 0 1 . 8 ROE 1 . 2 2 . 2 ∗∗ 2 . 2 ∗∗ M/B 1 . 6 0 . 5 2 . 5 ∗∗ Debt ratio 4 . 3 ∗∗ 5 . 3 ∗∗ 1 . 8 Thailand Busrisk 1 . 1 1 . 1 0 . 2 3-2 Size 0 . 3 0 . 3 1 . 7 Tangibility 0 . 7 1 . 2 2 . 9 ∗∗ ROE 10 . 8 ∗∗ 3 . 2 ∗∗ 2 . 9 ∗∗ M/B 2 . 3 ∗∗ 0 . 9 0 . 3 Debt ratio 6 . 8 ∗∗ 2 . 4 ∗∗ 1 . 0 Zimbabwe Busrisk 3 . 6 ∗∗ 0 . 8 1 . 2 4-1 Size 0 . 4 0 . 2 0 . 5 Tangibility 9 . 6 ∗∗ 3 . 3 ∗∗ 2 . 6 ∗∗ ROE 1 . 8 0 . 1 0 . 1 M/B 4 . 6 ∗∗ 1 . 9 1 . 7 Debt ratio 4 . 6 ∗∗ 1 . 5 1 . 0 Jordan Busrisk 1 . 8 1 . 1 1 . 0 1-0 Size 3 . 6 ∗∗ 1 . 8 1 . 2 Tangibility 0 . 8 0 . 6 0 . 8 ROE 0 . 8 0 . 5 0 . 1 M/B 0 . 5 0 . 7 0 . 0 Debt ratio 1 . 8 0 . 5 1 . 3 Pakistan Busrisk 3 . 7 ∗∗ 4 . 4 ∗∗ 4 . 9 ∗∗ 4-5 Size 8 . 1 ∗∗ 11 . 0 ∗∗ 9 . 3 ∗∗ Tangibility 9 . 6 ∗∗ 12 . 8 ∗∗ 10 . 6 ∗∗ ROE 0 . 3 3 . 0 ∗∗ 4 . 3 ∗∗ M/B 0 . 4 0 . 9 0 . 7 Debt ratio 8 . 5 ∗∗ 11 . 2 ∗∗ 9 . 6 ∗∗ Turkey Busrisk 1 . 8 1 . 4 0 . 7 3-1 Size 5 . 2 ∗∗ 1 . 8 1 . 0 Tangibility 0 . 4 0 . 4 1 . 3 ROE 11 . 8 ∗∗ 3 . 0 ∗∗ 2 . 7 ∗∗ M/B 1 . 6 0 . 1 0 . 3 Debt ratio 3 . 0 ∗∗ 0 . 7 0 . 2 Note: The reported values are the resulting t -statistics on coefficients that are estimated on interactive dummy variables, which are included in the regression to determine the difference in sensitivity to the independent financial variable across different countries, as represented by the dummy variable. Busrisk is the standard deviation of the return on investment. Size is the natural logarithm of sales in local currency. Tangibility is the tangibility of assets: total assets minus current assets dividend by total assets. ROE is the net income divided by stockholder s equity. M/B is the market value of the common stock divided by its book value. The debt ratio is total liabilities divided by total assets. a Difference in the number of significant coefficients: U.S. sample compared with emerging market sample. ∗∗ Significant at the 5% level.
Image of page 15
Emerging Market Firms 385 TABLE 7. Regression Estimates for the Entire Pooled Nine-Country Sample.
Image of page 16
Image of page 17

You've reached the end of your free preview.

Want to read all 18 pages?

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors