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Financial Innovation

Table 7 Results market capitalization

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

 

LMC

MMC

HMC

One step estimator

Two step estimator

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.

Coefficient

Std. Err.

Coefficient

Std. Err.

Lagged investment

−0.00513

0.025

− 0.00405***

0.001

− 0.1492***

0.030

− 0.12464**

0.059

− 0.00375

0.010

− 0.00286***

0.000

Change in sales

0.000828

0.002

0.001733**

0.001

0.072042***

0.005

0.091221***

0.024

0.039218***

0.007

0.014469

0.014

Cash flow

1.51621***

0.132

0.636307***

0.207

−0.12582***

0.033

−0.17951***

0.062

−0.03238

0.111

0.106368

0.076

Leverage

0.003101

0.003

−0.00198

0.005

0.229758***

0.011

0.281763***

0.077

1.430266***

0.029

1.458702***

0.039

Tangibility

0.018497

0.016

0.004607

0.011

−0.00938

0.016

− 0.01699

0.032

0.010599

0.017

0.001224

0.008

Cash flow* Tangibility

−0.32663***

0.048

−0.06371

0.082

0.021954

0.043

0.047649

0.106

−0.01715

0.027

−0.00083

0.013

Constant

−0.01397

0.044

0.044369

0.030

−0.09676***

0.030

−0.13657*

0.073

−1.19075***

0.067

−0.8928***

0.167

AR 1

–

–

0.0087

–

–

–

0.0310

–

–

–

.2157

–

AR 2

–

–

0.2990

–

–

–

0.1877

–

–

–

.8173

–

Sargan statistics

0.9038

–

0.2495

–

.5757

–

0.9287

–

.0119

–

.1763

–

  1. The table represents results using Market capitalization (size) 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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