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Table 9 Estimation results of base line investment models (High dividend paying firms)

From: Alternative measure of financial development and investment-cash flow sensitivity: evidence from an emerging economy

Variables

Q-Model (Eq. 2)

Euler Equation (Eq. 6)

Q-Model (Eq. 3)

Euler Equation (Eq. 7)

Q-Model (Eq. 4)

Euler Equation (Eq. 11)

(1)

(2)

(3)

(4)

(5)

(6)

Constant

0.0314 (1.21)

0.0415* (1.91)

0.0517* (1.91)

0.0782*(1.94)

0.0616** (2.15)

0.0811** (2.42)

\( {\left(\raisebox{1ex}{$I$}\!\left/ \!\raisebox{-1ex}{$K$}\right.\right)}_{it-1} \)

0.0619** (2.16)

0.0811** (2.12)

0.0583** (2.18)

0.0911* (1.89)

0.0558** (2.11)

0.0716** (2.35)

Q it

0.0368*** (5.68)

–

0.0511*** (4.88)

–

0.0617** (2.12)

–

\( {\left(\raisebox{1ex}{$S$}\!\left/ \!\raisebox{-1ex}{$K$}\right.\right)}_{it} \)

–

0.0981** (2.51)

–

0.1158** (2.10)

–

0.1192** (2.33)

\( {\left(\raisebox{1ex}{$ CF$}\!\left/ \!\raisebox{-1ex}{$K$}\right.\right)}_{it} \)

0.1154** (2.34)

0.1018** (2.15)

0.1054** (2.47)

0.1067** (2.06)

0.0918** (2.13)

0.0811** (2.39)

\( {\left(\raisebox{1ex}{$ CF$}\!\left/ \!\raisebox{-1ex}{$K$}\right.\right)}_{it}\kern0.5em \times \kern0.5em {FDI}_t \)

–

–

−0.0615** (−2.35)

− 0.0618** (− 2.38)

−0.0498** (− 2.16)

−0.0419** (− 2.15)

FDI t

–

–

–

–

0.1153** (2.01)

0.1315** (2.15)

m1 (p)

(0.00)

(0.00)

(0.00)

(0.00)

(0.00)

(0.00)

m2 (p)

(0.71)

(0.56)

(0.64)

(0.29)

(0.39)

(0.21)

Sargan Test

(0.26)

(0.29)

(0.34)

(0.36)

(0.31)

(0.38)

Hansen-J Test

(0.42)

(0.47)

(0.21)

(0.28)

(0.44)

(0.51)

Wald Test

χ2 (04) = 521.66 (0.0000)

χ2 (04) = 885.35 (0.0000)

χ2 (05) = 489.11 (0.0000)

χ2(05) = 636.19 (0.0000)

χ2 (06) = 694.36 (0.0000)

χ2(06) = 721.35 (0.0000)

  1. Notes: (1) The z values are in parentheses. (2) Time dummies are included, but are not reported. (3) The m1 and m2 are p values of the test for first- and second-order serial correlation of residuals, respectively. (4) Sargan test and Hansen J-test results present p value of the test for over identification, (5) Wald test results present p value of test for joint significance of coefficients. (6)*, **, and *** present the 10%, 5% and 1% level of significance respectively