Financial Innovation

Table 7 Ordered Probit regression results of the relationship between working capital components (accounts receivable, inventory, and accounts payable) and credit rating

From: The impact of working capital management on credit rating

Dependent variable	Rating
Dependent variable	Column 1	Column 2
AR	0.0016***	0.0025***
AR	(0.0001)	(0.0002)
AR²		− 0.0000023***
AR²		(0.0000005)
INV	0.0004***	0.0014***
INV	(0.0001)	(0.0002)
INV²		− 0.0000024***
INV²		(0.0000003)
AP	− 0.0011***	− 0.0011***
AP	(0.0001)	(0.0002)
AP²		0.000000033
AP²		(0.0000003)
SIZE	0.4906***	0.4912***
SIZE	(0.0044)	(0.0044)
COVERAGE	0.0523***	0.0521***
COVERAGE	(0.0009)	(0.0009)
LEV	− 1.6270***	− 1.6152***
LEV	(0.0349)	(0.0350)
CAP_INTEN	0.4443***	0.4564***
CAP_INTEN	(0.0153)	(0.0154)
LOSS	− 0.6586***	− 0.6588***
LOSS	(0.0145)	(0.0145)
BIG4	0.0016	0.0042
BIG4	(0.0120)	(0.0120)
SUBORD	− 0.1650**	− 0.1590**
SUBORD	(0.0639)	(0.0639)
Year effect	Yes	Yes
Industry effect	Yes	Yes
Pseudo R²	0.2888	0.2893
Firm-year observations	43,141	43,141

Variable definitions are provided in the Table 2. Standard errors are reported in parentheses. ***, **, and * indicate two-tailed significance at the 1%, 5%, and 10% levels. The results in this table are based on annual panel data of U.S. listed firms from WRDS merged with CRSP/Compustat files for the period between 1985 and 2017

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