Discrete Dynamics in Nature and Society

Research Article

Interest Rate Liberalization and Firm Leverage in China: Effects and Channels

Table 4

Average impact of the interest rate liberalization on firms’ leverage ratios.


Panel A: baseline regression results
Variables	Lev	Lev	Slev	Llev	Slev	Llev
Variables	(1)	(2)	(3)	(4)	(5)	(6)

Irlib1	−0.4397		−0.3549	−0.0706
Irlib1	(−5.44)		(−4.61)	(−1.66)
Irlib2		−0.2197			−0.1773	−0.0353
Irlib2		(−5.44)			(−4.61)	(−1.66)
Size	0.0620	0.0620	0.0228	0.0384	0.0228	0.0384
Size	(12.01)	(12.01)	(4.39)	(14.93)	(4.39)	(14.93)
ROA	0.0117	0.0117	0.0118	0.0025	0.0118	0.0025
ROA	(6.52)	(6.52)	(6.99)	(2.51)	(6.99)	(2.51)
MB	0.5306	0.5306	0.8266	−0.1672	0.8266	−0.1672
MB	(1.96)	(1.96)	(3.31)	(−1.18)	(3.31)	(−1.18)
NDTS	0.0680	0.0680	−0.0079	0.0720	−0.0079	0.0720
NDTS	(2.61)	(2.61)	(−0.33)	(4.39)	(−0.33)	(4.39)
PPE	−0.6571	−0.6571	−0.4986	−0.1843	−0.4986	−0.1843
PPE	(−21.07)	(−21.07)	(−17.32)	(−9.82)	(−17.32)	(−9.82)
Cflow	−0.0152	−0.0152	0.0491	−0.0626	0.0491	−0.0626
Cflow	(−0.80)	(−0.80)	(2.64)	(−5.96)	(2.64)	(−5.96)
Capex	−0.1655	−0.1655	−0.3587	0.1793	−0.3587	0.1793
Capex	(−5.01)	(−5.01)	(−10.73)	(8.98)	(−10.73)	(8.98)
Grow	0.0248	0.0248	0.0243	−0.0021	0.0243	−0.0021
Grow	(6.39)	(6.39)	(6.44)	(−0.97)	(6.44)	(−0.97)
Meci	−0.6457	−0.6457	−0.8898	0.1436	−0.8898	0.1436
Meci	(−2.27)	(−2.27)	(−3.16)	(0.82)	(−3.16)	(0.82)
Constant	2.4091	2.2453	4.2671	−1.3904	4.1349	−1.4167
Constant	(1.85)	(1.70)	(3.32)	(−1.73)	(3.18)	(−1.74)
Firm effects	Yes	Yes	Yes	Yes	Yes	Yes
Year effects	Yes	Yes	Yes	Yes	Yes	Yes
N	17956	17956	17956	17956	17956	17956
Adj-R²	0.1466	0.1466	0.0988	0.1330	0.0988	0.1330

Panel B: difference analysis results
	Coefficient		p-value		Conclusion
Irlib1	β_{Irlib1⟶Slev}vs.β_{Irlib1⟶Llev} = −0.3549vs. −0.0706		p ≤ 0.001		β_{Irlib1⟶Slev} < β_{Irlib1⟶Llev}
Irlib2	β_{Irlib2⟶Slev}vs.β_{Irlib2⟶Llev} = −0.1773vs. −0.0353		p ≤ 0.001		β_{Irlib1⟶Slev} < β_{Irlib1⟶Llev}

Note. , , and indicate statistical significance at 1 percent, 5 percent, and 10 percent, respectively. Two alternative measures of interest rate liberalization are used in Table 4. The t-statistics are in parentheses, we calculate them on the basis of standard errors that are robust to heteroscedasticity.