Table 6 Ordered Probit regression results of the non-linear relationship between credit rating and working capital
From: The impact of working capital management on credit rating
\(\begin{aligned} RATING_{i,t} & = a_{i,t} + \beta_{1} NWC_{i,t} + \beta_{2} NWC_{i,t}^{2} + \beta_{3} SIZE_{i,t} + \beta_{4} LEV_{i,t} \\ & \quad + \beta_{5} COVERAGE_{i,t} + \beta_{6} LOSS_{i,t} + \beta_{7} CAP\_INTEN_{i,t} \\ & \quad + \beta_{8} SUBORD_{i,t} + \beta_{9} BIG4_{i,t} + \varepsilon_{i,t } \\ \end{aligned}\) | |
|---|---|
Dependent variable | Rating |
Column 1 | |
NWC | 0.302*** |
(0.032) | |
NWC2 | − 0.032*** |
(0.012) | |
SIZE | 0.489*** |
(0.004) | |
COVERAGE | 0.052*** |
(0.001) | |
LEV | − 1.626*** |
(0.035) | |
CAP_INTEN | 0.419*** |
(0.015) | |
LOSS | − 0.654*** |
(0.014) | |
BIG4 | − 0.002 |
(0.012) | |
SUBORD | − 0.165*** |
(0.064) | |
Year effect | Yes |
Industry effect | Yes |
Pseudo R2 | 0.2875 |
Firm-year observations | 43,180 |