1. Table 2. Adjusted R-squared Comparison
GIM Index
E Index
Governance Index
(0.000)
(0.000)
(0.000)
Capital Expenditures / Total Assets
2.112 (0.000)
2.188 (0.000)
1.690 (0.000)
1.775 (0.000)
ROA
3.986 (0.000)
4.004 (0.000)
4.310 (0.000)
4.326 (0.000)
Ln(Total Assets )
(0.000)
(0.000)
(0.000)
(0.000)
Total Debt / Total Assets
(0.000)
(0.000)
(0.000)
(0.000)
R&D / Sales
8.934 (0.000)
8.997 (0.000)
7.993 (0.000)
8.025 (0.000)
Ln(Firm Age)
(0.000)
(0.000)
(0.000)
(0.000)
Institutional Ownership
(0.000)
(0.000)
Institutional Ownership Squared
0.004 (0.000)
0.003 (0.000)
Intercept
0.848 (0.000)
0.791 (0.000)
0.752 (0.000)
0.716 (0.000)
Firm fixed effects
Yes No
Year fixed effects
Number of firm-year observations
23018
R_squared
0.4072
0.4053
0.2642
0.2621
Adjusted R_squared
0.4035
0.2641
0.2620
This table reports the results of the comparison of the GIM index and the E index by comparing the adjusted R-squares in the following
nonnested alternative models:
Qit = α0 + α1 GIM Indexit + α2 [Capital Expenditures / Total Assets]it + α3 ROAit + α4 Ln [Total Assets]it + α5 [Long-term Debt / Total Assets]it + α6 [R&D / Sales]it + α7 Ln [Firm Age]it + α8 Insider Ownershipit + α9 Insider Ownership Squaredit + Ii + µi + ϒt + εi (1)
Qit = α0 + α1 E Indexit + α2 [Capital Expenditures / Total Assets]it + α3 ROAit + α4 Ln [Total Assets]it + α5 [Long-term Debt / Total Assets]it + α6 [R&D / Sales]it + α7 Ln [Firm Age]it + α8 Insider Ownershipit + α9 Insider Ownership Squaredit + Ii + µi + ϒt + εi (2)
where Qit is the industry-adjusted Tobin’s Q of firm i in year t, , Ii is the industry fixed effect for each three-digit SIC code, µi is the firm fixed effect,
ϒt is the year fixed effect, and εi is a heteroskedastic error term. The last two columns are results of regressions without firm fixed effects.
Frederick Adjei et al. Gompers versus Bebchuck Governance Measure and Firm Value. Journal of Finance and
Economics, 2016, Vol. 4, No. 6, doi: /jfe-4-6-3
© The Author(s) Published by Science and Education Publishing.