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

Table 7

Robustness analyses using system GMM regression.

Panel A: system GMM regression results
Variables	Lev	Lev	Slev	Llev	Slev	Llev
	(1)	(2)	(3)	(4)	(5)	(6)
Irlib1	−0.0729		−0.1233	0.0207
	(−2.24)		(−3.45)	(0.82)
Irlib2		−0.0490			−0.0822	0.0137
		(−2.23)			(−3.41)	(0.80)
Controls	Yes	Yes	Yes	Yes	Yes	Yes
Constant	−1.3570	−1.2701	−0.8339	−0.7994	−0.7011	−0.8179
	(−1.79)	(−1.63)	(−0.97)	(−1.38)	(−0.79)	(−1.37)
Year/industry	Yes	Yes	Yes	Yes	Yes	Yes
N	7119	7119	7119	7119	7119	7119
Wald chi^2	2755.69	2758.02	1909.34	2038.42	1911.55	2035.85
p-value	0.001	0.001	0.001	0.001	0.001	0.001
Panel B: difference analysis results
	Coefficient		p-value		Conclusion
Irlib1	βIrlib1⟶Slevvs. βIrlib1⟶Llev = −0.1233vs. 0.0207		p ≤ 0.001		βIrlib1⟶Slev < βIrlib1⟶Llev
Irlib2	βIrlib2⟶Slevvs.βIrlib2⟶Llev = −0.0822^∗∗∗vs. 0.0137		p ≤ 0.001		βIrlib1⟶Slev < βIrlib1⟶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 7.