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Financial Innovation

Table 6 Results business group classification

From: Financial constraints and investment decisions of listed Indian manufacturing firms

 

Group firms

Non-group firms

One step estimator

Two step estimator

One step estimator

Two step estimator

Investment

Coefficient

Std. Err.

Coefficient

Std. Err.

Coefficient

Std. Err.

Coefficient

Std. Err.

Lagged investment

− 0.00559

0.004

− 0.00553***

0.000

− 0.04022

0.039

0.026228

0.027

Change in sales

0.287974***

0.003

0.280323***

0.006

0.000919

0.000

0.000969

0.001

Cash flow

−0.48834***

0.022

− 0.48835***

0.023

0.228716***

0.046

0.201292**

0.087

Leverage

0.698807***

0.011

0.655403***

0.021

0.000739

0.001

0.000628

0.002

Tangibility

−0.00688

0.007

−0.01444**

0.005

0.00476

0.009

0.006577

0.010

Cash flow* Tangibility

0.021803

0.019

0.04987***

0.018

−0.00684

0.014

−0.00999

0.017

Constant

−0.51621***

0.021

−0.47418***

0.058

0.108221***

0.025

0.091152***

0.028

AR 1

–

–

.1812

–

–

–

.0006

–

AR 2

–

–

.1630

–

–

–

.2200

–

Sargan statistics

.000

–

.4215

–

0.0711

–

.1981

–

  1. The table represents results using business group affiliation as the priori classification for dividing firms. AR1 and AR2 represent Arellano and Bond test (1991) for autocorrelation in first difference errors. Sargan test for the over-identifying restriction is also highlighted in the table. ***, **,* represents significance at 99%, 95% and 90% respectively
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