Table 6 Cash flow sensitivity of external financing: credit multiplier model
Independent variables | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Dependent Variable: External_Financing | Cash_Flow | Growth | Size | Cash | Inven_tory | PPE | Debt/ Equity | Tangi_bility | Cash_Flow × Tangi_bility | Hansen’s J-stat (p-value) | AR(2) |
Panel A: KZ Index | |||||||||||
Constrained firms (CF) | −0.0116*** (0.003) | 0.0019** (0.0008) | 0.0123*** (0.001) | 0.0636*** (0.023) | − 0.0111** (0.005) | −0.0627*** (0.021) | − 0.0055** (0.002) | −0.0208*** (0.001) | 0.0110*** (0.003) | 0.117 | 0.100 |
Unconstrained firms (UCF) | −0.0127*** (0.001) | 0.0139*** (0.0023) | 0.0191*** (0.004) | 0.0139*** (0.005) | − 0.0263*** (0.004) | −0.0512** (0.020) | − 0.0026*** (0.0001) | −0.0189** (0.000) | − 0.0312*** (0.001) | 0.323 | 0.144 |
Panel B:Debt to Asset Ratio | |||||||||||
Constrained firms (CF) | −0.0031** (0.0012) | 0.0018*** (0.0006) | −0.027*** (0.005) | 0.0226*** (0.009) | 0.0541*** (0.014) | 0.0541*** (0.019) | −0.486*** (0.034) | − 0.0918*** (0.013) | 0.0776*** (0.023) | 0.209 | 0.474 |
Unconstrained firms (UCF) | −0.0391*** (0.010) | 0.0321*** (0.007) | 0.0321*** (0.011) | 0.0203*** (0.005) | − 0.0362*** (0.013) | −0.0324*** (0.009) | − 0.0016*** (0.00001) | −0.0647*** (0.020) | − 0.0203*** (0.001) | 0.435 | 0.113 |
Panel C: Interest Coverage Ratio | |||||||||||
Constrained firms (CF) | −0.0012*** (0.0004) | 0.0031*** (0.001) | 0.0310*** (0.012) | 0.0103** (0.007) | − 0.0281*** (0.003) | −0.0019*** (0.00005) | − 0.0012*** (0.00002) | −0.0845*** (0.0032) | − 0.0612*** (0.003) | 0.180 | 0.317 |
Unconstrained firms (UCF) | −0.0776*** (0.020) | 0.0087*** (0.002) | 0.0251*** (0.008) | 0.0752*** (0.031) | −0.0109*** (0.002) | − 0.0305*** (0.003) | 0.0013*** (0.00001) | − 0.0695*** (0.0024) | −0.0866*** (0.026) | 0.409 | 0.923 |