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Financial Innovation

Table 12 Endogeneity Checks on Innovation Output (Patents)

From: Stock liquidity, financial constraints, and innovation in Chinese SMEs

 

INNOV_PAT

 

Lag in

Variables

(1)

Changes in Variables

(2)

Firm Fixed

Effects

(3)

System GMM

(4)

CPQS

− 30.414***

− 19.925**

− 26.040***

− 38.651***

 

(10.009)

(8.742)

(9.088)

(13.525)

TSHARE

0.063**

0.040***

0.013

0.059*

 

(0.027)

(0.013)

(0.022)

(0.032)

SHRHFD5

18.437***

− 1.362

5.510

4.149

 

(6.943)

(14.453)

(13.219)

(17.094)

TO

− 16.691

− 11.332

− 23.995

− 25.560

 

(14.214)

(15.335)

(18.736)

(36.296)

RET

5.170

− 1.522

2.450

0.091

 

(3.791)

(1.975)

(2.196)

(2.726)

FREE

0.037

− 0.022

− 0.003

0.034

 

(0.053)

(0.029)

(0.051)

(0.079)

VOL

0.018

− 0.292

− 0.435

− 0.416

 

(0.484)

(0.428)

(0.577)

(0.871)

EARN

− 2.741

− 0.157

3.259

0.363

 

(3.876)

(2.767)

(4.262)

(7.970)

INTAN

-2.230

4.331*

-2.099

1.119

 

(3.505)

(2.338)

(4.066)

(5.435)

LEV

1.783

1.836

4.351

4.307

 

(4.342)

(3.752)

(4.692)

(5.950)

ROE

0.444

− 4.550**

− 3.391

− 7.241*

 

(5.615)

(2.081)

(3.425)

(4.299)

Q

− 0.247

0.337

0.301

0.387

 

(0.251)

(0.270)

(0.283)

(0.339)

BTM

10.300***

4.217*

10.313**

8.228

 

(3.520)

(2.342)

(4.049)

(5.412)

CAPITAL

18.820**

3.302

9.691

8.046

 

(8.739)

(5.601)

(6.990)

(11.466)

SALES

0.001

− 0.001

− 0.004

− 0.000

 

(0.008)

(0.003)

(0.007)

(0.010)

lnAGE

− 0.903

− 4.628

− 15.596*

1.706

 

(1.913)

(5.302)

(8.017)

(3.252)

INNOV_PATt-1

   

0.194***

    

(0.066)

CONSTANT

− 2.199

− 0.477

52.373**

− 31.568

 

(5.741)

(5.263)

(24.683)

(30.756)

Year dummies

Yes

Yes

Yes

Yes

Industry dummies

Yes

Yes

No

Yes

N

3948

3927

4719

3941

Adj.R2

0.030

0.002

0.022

 

Hansen test

(p-value)

   

546.740

(0.210)

AR (1)

(p-value)

   

4.390

(0.000)

AR (2)

(p-value)

   

0.790

(0.432)

  1. Columns (1) and (2) estimate the baseline model for the number of patents as the innovation proxy but specify the independent variables in one-year lagged (t-1) and annual changes (â–³). Columns (3) and (4) re-estimate the model with the firm fixed effects estimator and system GMM, respectively. The diagnostic tests for system GMM are presented: the Hansen test of over-identification with the null that all instruments are valid. AR (1) and AR (2) tests are under the null of no first-order and second-order serial correlation, respectively, in the first-differenced residuals. The definition of all variables is presented in Appendix A. Coefficients for the year and industry dummies are not reported for brevity and only double-clustered adjustments are reported in parentheses. N is the number of firm-year observations. ***, ** and * denote statistical significance at the 1%, 5% and 10% levels, respectively
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