decrease (increase) in employed in transaction an M&A across period 1 fraction of cash and 2. depicts a significant negative relationship at a 10% significance Blockownership level with a coefficient of (-0.038). Moreover, depicts a highly significant Cashflow_assets positive relationship at 1% significance level with a coefficient of (1.863). appears to be significantly negatively correlated with FinancialLeverage fraction of cash at a 5% significance level with a coefficient of (-0.437). Lastly, the variable has a Runup significant positive correlation with fraction of cash at 10% significance level with a coefficient of (0.077). Specification (3) appears to have an R-Square of (0.240), which is relatively higher than specification (2), indicating a slightly more accurate goodness of fit. Results in specification (4) indicate that is insignificant in explaining Credit_ratinglevel the used in transaction M&A. However, given the fact that specification fraction of cash (4) takes into account all control variables across target, bidder and deal specific characteristics, the existence of endogenity is applicable and this will be accounted for in section 6.2.3. is significant at a 10% significance level with a FinancialLeverage coefficient of (-0.375), indicating an inverse relationship with fraction of cash. is also negatively correlated with at a 5% significance Blockownership fraction of cash level with a coefficient of (-0.045). Furthermore, is negatively correlated with Num_analyst at a 1% significance level with a coefficient of (-0.115). On the contrary, fraction of cash appeared to have positive relationship with fraction of cash with a Cashflow_assets coefficient of (1.717). Further scrutinizing the goodness of fit of all four specifications mentioned above, the of specification (1) was observed to be insignificant. Therefore, we do not reject the null hypothesis that all regression coefficients are equal to zero, indicating an overall weak goodness of fit. 6.2.3 Endogenity control for OLS The issue of endogenity stands paramount in many empirical studies and accounting for this goes far and beyond in establishing an unbiased and consistent coefficient estimates.
decrease (increase) in fraction of cash employed in transaction an M&A across period 1 and 2. Blockownership depicts a significant negative relationship at a 10% significance level with a coefficient of (-0.038). Moreover, Cashflow_assets depicts a highly significant positive relationship at 1% significance level with a coefficient of (1.863). FinancialLeverage appears to be significantly negatively correlated with fraction of cash at a 5% significance level with a coefficient of (-0.437). Lastly, the variable Runup has a significant positive correlation with fraction of cash at 10% significance level with a coefficient of (0.077). Specification (3) appears to have an R-Square of (0.240), which is relatively higher than specification (2), indicating a slightly more accurate goodness of fit. Results in specification (4) indicate that Credit_ratinglevel is insignificant in explaining the fraction of cash used in transaction M&A. However, given the fact that specification (4) takes into account all control variables across target, bidder and deal specific characteristics, the existence of endogenity is applicable and this will be accounted for in section 6.2.3. FinancialLeverage is significant at a 10% significance level with a coefficient of (-0.375), indicating an inverse relationship with fraction of cash. Blockownership is also negatively correlated with fraction of cash at a 5% significance level with a coefficient of (-0.045). Furthermore, Num_analyst is negatively correlated with fraction of cash at a 1% significance level with a coefficient of (-0.115). On the contrary, Cashflow_assets appeared to have positive relationship with fraction of cash with a coefficient of (1.717). Further scrutinizing the goodness of fit of all four specifications mentioned above, the of specification (1) was observed to be insignificant. Therefore, we do not reject the null hypothesis that all regression coefficients are equal to zero, indicating an overall weak goodness of fit. 6.2.3 Endogenity control for OLS The issue of endogenity stands paramount in many empirical studies and accounting for this goes far and beyond in establishing an unbiased and consistent coefficient estimates.
5468542.docx