Table 5 Ordered Probit regression results of the credit rating and working capital relationship
From: The impact of working capital management on credit rating
\(RATING_{i,t} = a_{i,t} + \beta_{1} NWC_{i,t} + \beta_{2} SIZE _{i,t} + \beta_{3} LEV_{i,t} + \beta_{4} COVERAGE_{i,t} + \beta_{5} LOSS_{i,t} + \beta_{6} CAP\_INTEN_{i,t} + \beta_{7} SUBORD_{i,t} + \beta_{8} BIG4_{i,t} + \varepsilon_{i,t }\) | ||||||||
|---|---|---|---|---|---|---|---|---|
Dependent variable | Rating | MICRORATING | Rating | MICRORATING | ||||
Column 1 | Column 2 | Column 3 | Column 4 | Column 5 | Column 6 | Column 7 | Column 8 | |
NWC | 0.324*** | 0.316*** | 0.345*** | 0.326*** | ||||
(0.029) | (0.032) | (0.028) | (0.029) | |||||
CCC | 0.0010*** | 0.001*** | 0.0011*** | 0.0009*** | ||||
(0.0001) | (0.001) | (0.0001) | (0.0001) | |||||
SIZE | 0.301*** | 0.489*** | 0.286*** | 0.480*** | 0.304*** | 0.490*** | 0.290*** | 0.481*** |
(0.004) | (0.004) | (0.003) | (0.004) | (0.004) | (0.004) | (0.003) | (0.004) | |
COVERAGE | 0.021*** | 0.052*** | 0.023*** | 0.053*** | 0.021*** | 0.0519*** | 0.023*** | 0.053*** |
(0.001) | (0.001) | (0.001) | (0.001) | (0.001) | (0.0009) | (0.001) | (0.001) | |
LEV | − 1.990*** | − 1.624*** | − 1.845*** | − 1.483*** | − 1.972*** | − 1.617*** | − 1.828*** | − 1.478*** |
(0.033) | (0.035) | (0.031) | (0.032) | (0.033) | (0.034) | (0.031) | (0.032) | |
CAP_INTEN | 0.550*** | 0.423*** | 0.523*** | 0.420*** | 0.587*** | 0.437*** | 0.560*** | 0.434*** |
(0.012) | (0.015) | (0.012) | (0.014) | (0.012) | (0.015) | (0.012) | (0.014) | |
LOSS | − 0.797*** | − 0.655*** | − 0.794*** | − 0.665*** | − 0.796*** | − 0.658*** | − 0.794*** | − 0.668*** |
(0.014) | (0.014) | (0.013) | (0.013) | (0.014) | (0.0145) | (0.013) | (0.013) | |
BIG4 | 0.064*** | − 0.001 | 0.079*** | 0.012 | 0.068*** | 0.0004 | 0.082*** | 0.014 |
(0.012) | (0.012) | (0.011) | (0.011) | (0.012) | (0.012) | (0.011) | (0.011) | |
SUBORD | − 0.102* | − 0.164*** | − 0.135** | − 0.205*** | − 0.199*** | − 0.160*** | − 0.132** | − 0.202*** |
(0.062) | (0.064) | (0.058) | (0.059) | (0.062) | (0.063) | (0.058) | (0.059) | |
Year effect | Yes | Yes | Yes | Yes | ||||
Industry effect | Yes | Yes | Yes | Yes | ||||
Pseudo R2 | 0.1932 | 0.2874 | 0.1220 | 0.1879 | 0.1946 | 0.288 | 0.123 | 0.1883 |
Firm-year Observations | 43,183 | 43,183 | 43,183 | 43,183 | 43,183 | 43,183 | 43,183 | 43,183 |