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Frontiers of Business Research in China

Table 8 Two-stage least squares (2SLS) analysis for firm performance and chair identity

From: Non-family chair and corporate performance

 

(1)

(2)

(3)

First

Second

First

Second

First

Second

NFChair (instrumented)

 

−0.053***

 

−0.084***

 

−0.068***

  

(−2.73)

 

(−3.66)

 

(−4.04)

Size

−0.015**

0.015***

−0.009

0.015***

−0.011

0.015***

 

(−2.16)

(12.50)

(−1.26)

(11.64)

(−1.62)

(12.19)

Leverage

0.106***

−0.033***

0.096***

−0.030***

0.098***

−0.032***

 

(6.49)

(−9.14)

(5.87)

(−7.83)

(5.99)

(−9.20)

MB

0.012***

−0.000

0.011***

−0.000

0.011***

−0.000

 

(7.04)

(−0.84)

(6.47)

(−0.14)

(6.38)

(−0.66)

Board

−0.110***

−0.004

− 0.123***

−0.010

− 0.115***

−0.008

 

(−3.97)

(−0.78)

(−4.26)

(−1.59)

(− 4.01)

(− 1.37)

Independence

−0.425***

− 0.032*

− 0.514***

−0.057**

− 0.480***

−0.049**

 

(− 4.39)

(− 1.65)

(− 4.91)

(−2.48)

(−4.59)

(−2.32)

Duality

−0.063***

− 0.006***

− 0.056***

−0.008***

− 0.056***

−0.007***

 

(−6.09)

(−2.63)

(−5.32)

(−3.14)

(−5.32)

(− 3.04)

Top1

−0.002***

0.001***

−0.002***

0.000***

−0.002***

0.000***

 

(−6.31)

(6.50)

(−6.02)

(4.96)

(−6.03)

(6.11)

Top25

−0.004***

0.000***

−0.004***

0.000*

−0.004***

0.000***

 

(−9.18)

(3.29)

(−8.68)

(1.93)

(−8.44)

(2.91)

Institution

0.003***

0.002***

0.003***

0.002***

0.003***

0.002***

 

(3.10)

(10.09)

(2.98)

(9.96)

(2.92)

(10.28)

Foreign

−0.013

0.001

0.020

0.001

0.020

0.001

 

(−0.45)

(0.30)

(0.71)

(0.21)

(0.71)

(0.23)

Tangibility

0.146***

0.001

0.140***

0.004

0.131***

0.002

 

(3.92)

(0.13)

(3.69)

(0.52)

(3.46)

(0.22)

Firm age

0.010***

0.000

0.010***

0.001

0.010***

0.000

 

(9.09)

(0.67)

(9.20)

(1.62)

(9.03)

(1.30)

CapEx

−0.622***

− 0.013

− 0.652***

− 0.041*

− 0.648***

− 0.031

 

(−7.43)

(− 0.68)

(−7.64)

(− 1.87)

(−7.63)

(− 1.60)

Instrumental variables

      

Divorce rate

0.007***

   

0.005***

 
 

(9.12)

   

(7.16)

 

Meal income

  

−0.036***

 

−0.030***

 
   

(−8.25)

 

(−6.71)

 

Intercept

1.049***

−0.261***

0.943***

−0.276***

0.812***

− 0.289***

 

(5.42)

(−6.41)

(5.64)

(−7.54)

(4.84)

(−8.63)

Industry fixed effects

Yes

Yes

Yes

Yes

Yes

Yes

Year fixed effects

Yes

Yes

Yes

Yes

Yes

Yes

Obs.

7902

7902

7584

7584

7584

7584

F-statistics

34.98

 

36.80

 

37.36

 

Sargan chi-squared

    

1.189

 

Sargan p-value

    

0.276

 

Adjusted R2

0.171

0.125

0.172

0.040

0.178

0.093

  1. This table presents the results of 2SLS instrumental variable regressions that control for potential endogeneity of reversal causality. We use Divorce rate and Meal income as instruments to identify chair identity in the first-stage and then regress the firm performance measure on the fitted values of NFChair and other controls. All regressions include year and industry dummies, but their coefficients are not reported for the sake of brevity. See the Appendix for detailed descriptions of the variables. At the bottom of the table, we also include the results from the weak instrument tests and overidentification tests. The values in parentheses are standard errors that are robust to heteroskedasticity and clustered at the firm level. Asterisks denote statistical significance at the 1% (***), 5% (**) or 10% (*) level, respectively
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