Ownership structure, audit quality and information disclosure an approach at firm level in vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAM FOR M.A IN DEVELOPMENT ECONOMICS OWNERSHIP STRUCTURE, AUDIT QUALITY AND INFORMATION DISCLOSURE: AN APPROACH AT FIRM LEVEL IN VIETNAM By QUACH MANH HUNG MASTER OF ARTS IN DEVELOPMENT ECONOMICS Ho Chi Minh City, March 2014 ABSTRACT This paper investigates the relationship between the ownership concentration, audit quality and the amount of firm-specific information captured in the stock price The study covers 195 Vietnamese listed firms on the Hochiminh stock market from 2006 to 2011 The findings confirm the positive relationship between the ownership of the largest shareholder and the stock price informativeness of that firm Moreover, this relationship is not significant when the largest owner is related to the state Further, the largest owner would like to disclose more information to the market if his asset, tied with the stock price, is large The reason is that the asset value could be reduced when the investors punish the owner bad behavior by discounting the stock price In addition, the results also show a positive impact of audit quality on the disclosure of firm specific information Moreover, a trend of better information environment for information disclosure is also discovered Finally, this research also finds out that the ownership concentration of top largest shareholders also has a similar positive impact on the corporate disclosure of firm-specific information Key words: ownership concentration, state joint stock firms, audit, disclosure i ACKNOWLEDGMENT Foremost, I would like to sincerely and gratefully thank Dr Pham Thi Bich Ngoc, my enthusiastic supervisor, for her great support, crucial advice and precious guidance during my thesis completion Besides, I would like to thank Dr Truong Dang Thuy who also gave me useful assistance for my thesis More special thanks go to the Vietnam – Netherlands program, especially professors, staffs and classmates, for their helps, encouragement and wonderful knowledge Last but not least, I would like to thank my family for their sacrifices for supporting me in not only the thesis writing but also my whole life ii TABLE OF CONTENTS ABSTRACT .i ACKNOWLEDGMENT ii TABLE OF CONTENTS iii LIST OF TABLES v LIST OF FIGURES vi INTRODUCTION 1.1 Problem statement .1 1.2 Research objectives 1.3 Research questions 1.4 Data and methodology 1.5 Thesis structure LITERATURE REVIEW 2.1 Some concepts 2.1.1 Corporate disclosure 2.1.2 Ownership concentration 2.1.3 Audit quality 2.1.4 State joint stock firm 2.2 Theoretical literature 2.2.1 Theory of informed trading, asymmetric information and corporate disclosure 2.2.2 The relationship between ownership concentration and the corporate disclosure 13 2.2.3 The relationship between government ownership and the corporate disclosure 15 2.2.4 The impact of audit quality on the corporate disclosure 16 2.3 Empirical literature 18 2.3.1 Ownership concentration and the information disclosure 18 2.3.2 Government ownership and the information disclosure 22 2.3.3 Audit quality on the information disclosure 22 2.4 Hypothesis construction 23 iii 2.4.1 Ownership concentration and information disclosure 23 2.4.2 Auditor quality and information disclosure 23 2.4.3 Public firm and information disclosure 24 DATA AND METHODOLOGY 25 3.1 Data source 25 3.2 Model specification 25 3.2.1 Constructing the dependent variable 28 3.2.2 Models 31 3.3 Estimation strategy and correction method 35 3.3.1 Ordinaly least squares 35 3.3.2 Fixed effects model (FE) 36 3.3.3 Random effects model (RE) 36 3.3.4 Pooled OLS, Fixed effects or Random effects 37 OVERVIEW, STATISTICS SUMMARY, EMPIRICAL RESULTS AND ANALYSIS 40 4.1 Overview: 40 4.2 Statistics summary 41 4.3 Empirical results and analysis: 50 4.3.1 Ownership concentration, audit quality and corporate disclosure: 50 4.3.2 State joint stock firms and information disclosure 56 4.3.3 Robustness check 61 CONCLUSION 71 5.1 Main findings 71 5.2 Policy implications 72 5.3 Limitations and further researches 73 REFERENCE 76 APPENDIX 79 A Firms and industry category summarize 79 B Regression results 80 iv LIST OF TABLES Table 2.1: Empirical researches about ownership concentration and corporate disclosure 21 Table 2.2: Empirical researches about government ownership and corporate disclosure 22 Table 2.3: Empirical researches about the audit quality and corporate disclosure 23 Table 3.1: Coefficients and expected sign 35 Table 4.1: Descriptive statistic 41 Table 4.2: Correlation table of variables 49 Table 4.3: VIF results 49 Table 4.4: Ownership concentration, audit quality and corporate disclosure 52 Table 4.5: State joint stock firms and corporate disclosure 58 Table 4.6: Weighted regression by FE and RE model 63 Table 4.7: Regression results of Independent variable HSUM with FE and RE model 67 Table 4.8: Regression results of Independent variable H with FE and RE model 69 v LIST OF FIGURES Figure 2.1: Capital and information flows in the financial market economy Figure 3.1: Empirical study stages 27 Figure 3.2: Diagram of the comparison progress between FE & RE models 38 Figure 4.1: Informativeness level by year 43 Figure 4.2: Ownership concentration by year 44 Figure 4.3: Fitted value of Corporate disclosure against Ownership concentration 45 Figure 4.4: Fitted of INFO against TOPHOLD of State joint stock firms 46 Figure 4.5: Fitted value of INFO against TOPHOLD of Private joint stock firms 48 vi INTRODUCTION 1.1 Problem statement From the first trading day at 28/07/2000 with only two listed stocks, the Hochiminh stock market just have its 13th birthday with 302 listed stocks, funds and 28 bonds With the capitalizing value around 40 billion of USD (hsx.vn), the largest stock market in Vietnam only accounts 23,5% of the GDP (170 billion of USD) Hence, there still a large room for developing However, although much effort of the Vietnamese state and firms in improving the domestic investment environment to make it more attractive to investors, both foreign and domestic, it is not an easy task One major obstacle for the development of the stock market is the Vietnamese informativeness environment especially the corporate disclosure practices In fact, the stock market is always considered the best way to forecast the economic performance The main reason is that the stock market reflects much economic information through its stock pricing system Not only the macro events but also the firm specific information is captured in the market movements However, the reflection of those firm specific information is not always good because the corporate disclosure problem Bad disclosure blocks the information to be captured in the stock price and creates the asymmetric information between the insiders and uninformed outside investors Due to this market failure, the cost for acquiring information becomes higher for the outside investor (Jiang, et al, 2011) The more severe the situation is, the less attractive the investment environment is Thus, the fund attraction progress for the capital market in order to lower the domestic cost of capital could be in vain if the corporate disclosure problem is not resolved (Jiang, et al, 2011; Lawrence, 2013) Hence, analyzing this problem is important for Vietnam situation when we are in the urge of attracting capital flow for developing the domestic financial market According to Morck, Yeung, and Yu (2000), low level of informativeness is a common phenomenon in emerging financial markets The problem is the consequence of many serious corporate and institution structure problems Firstly, according to Ball (2001); Chan and Hameed (2006) the bad enforcement of disclosure regulations in emerging markets makes the insiders and managers have less incentive to release more information for the outside investors Secondly, according to Gul, Kim and Qiu (2010), the corporate structure is considered as a main cause for the problem In emerging economies, the ownership concentrates in hands of the entrepreneurs and their relatives Meanwhile, in the case of transitions economies, the largest shareholders are related to the state The high ownership concentration in a small number and powerful owners certainly has a large influence on the disclosure policy of the firms In this study, the impact of the ownership structure on the disclosure activities is the main research objective The first argument behind this suggestion is based on the agency problem mentioned by Jensen and Meckling (1976), which states that the controlling shareholder would hide corporate information from outside investors for their private benefit, such as covering their corruption or inside trading Therefore, the ownership concentration, especially state ownership, in Vietnam doesn’t favorite the information disclosure system Hence, the ownership level would have a negative relationship with the corporate disclosure level However, there could be another argument, by Healy and Palepu (2001), that the high holding rate of a firm stock is a strong commitment for the owner faith The investors could easily punish his bad behavior by discounting his asset easily and directly on the stock market Thus, the effect of ownership concentration on the corporate disclosure is important but with mixed results Moreover, Gul, Kim and Qiu (2010) also argue that auditors with much experiences and skills in analyzing financial information will contribute an important role for the transparency of the market Therefore, good audit quality could have a positive relationship with the information disclosure level Many previous studies such as Gul, Kim and Qiu (2010), Fernandes and Ferreira (2008),… intends to find the relationship between ownership concentration, audit quality and the information disclosure However, such empirical researches had never been performed in Vietnam Therefore, by analyzing the firm-specific return variation and its relationship with ownership concentration and audit quality, this study aims to shed a light to the situation of transparency of Vietnam stock market By drawing the results, this study aims to contribute a better understanding about the importance information disclosure and ownership concentration in the case of emerging country like Vietnam Then some findings about the Vietnamese corporate governance structure and governance could be drawn out A contribution to the debate between managerial entrenchment and incentive alignment of large shareholder is also expected A better glance about the audit performance could also be acquired at the end of this study 1.2 Research objectives Based on all the important points mentioned earlier, this study’s main objectives are to analyze: - The relationship between ownership concentration and the information disclosure of Vietnamese firms - The difference disclosure quality between state ownership and private ownership - The impact of audit quality on the stock price informativeness 1.3 Research questions For reaching those objectives, the followings research questions must be answered: Table 56: Hausman test result Coefficients (b) (B) fe re HSUM SIZE INDSIZE VOL 2007bn.year 2008.year 2009.year 2010.year 2011.year 898652 -8.70e-09 -3.44e-10 -1.44e-06 456165 6855333 1.161037 2.114964 1.997783 (b-B) Difference 815445 -9.68e-09 -1.22e-11 -2.17e-06 2916031 5294015 8533081 1.703316 1.583907 0832069 9.73e-10 -3.32e-10 7.28e-07 1645619 1561318 3077286 4116488 4138756 sqrt(diag(V_b-V_B)) S.E .3862692 6.48e-09 2.55e-10 3.00e-07 137795 1814633 2697972 3542047 390037 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(6) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 5.89 Prob>chi2 = 0.4352 118 Table 57: Fixed effects regression result Fixed-effects (within) regression Group variable: id Number of obs Number of groups = = 306 100 R-sq: Obs per group: = avg = max = 3.1 within = 0.5277 between = 0.3879 overall = 0.4457 corr(u_i, Xb) F(8,99) Prob > F = 0.0613 = = (Std Err adjusted for 100 clusters in id) Robust Std Err INFO Coef t HSUM SIZE INDSIZE VOL 898652 -8.70e-09 -3.44e-10 -1.44e-06 4509632 8.08e-09 3.81e-10 3.96e-07 1.99 -1.08 -0.90 -3.64 0.049 0.284 0.368 0.000 0038431 -2.47e-08 -1.10e-09 -2.23e-06 1.793461 7.33e-09 4.11e-10 -6.57e-07 year 2007 2008 2009 2010 2011 456165 6855333 1.161037 2.114964 1.997783 2471865 3096658 4538388 5786566 6464298 1.85 2.21 2.56 3.65 3.09 0.068 0.029 0.012 0.000 0.003 -.0343066 0710891 260522 966784 7151257 9466366 1.299977 2.061551 3.263145 3.28044 _cons -.0702203 3450618 -0.20 0.839 -.7548978 6144573 sigma_u sigma_e rho 70030323 55074052 61786577 (fraction of variance due to u_i) 119 P>|t| [95% Conf Interval] Table 58: Random effects regression result Random-effects GLS regression Group variable: id Number of obs Number of groups = = 306 100 R-sq: Obs per group: = avg = max = 3.1 within = 0.5246 between = 0.6003 overall = 0.5444 corr(u_i, X) Wald chi2(15) Prob > chi2 = (assumed) = = (Std Err adjusted for 100 clusters in id) Robust Std Err INFO Coef z HSUM SIZE INDSIZE VOL 8662997 -1.30e-08 -2.66e-10 -1.85e-06 2997002 3.67e-09 3.14e-10 3.17e-07 2.89 -3.53 -0.85 -5.85 0.004 0.000 0.397 0.000 2788982 -2.01e-08 -8.80e-10 -2.48e-06 1.453701 -5.77e-09 3.49e-10 -1.23e-06 year 2007 2008 2009 2010 2011 3900496 6706905 1.11998 2.079784 1.9909 1971861 2450927 3540403 442844 4950907 1.98 2.74 3.16 4.70 4.02 0.048 0.006 0.002 0.000 0.000 0035719 1903176 4260736 1.211826 1.02054 7765273 1.151063 1.813886 2.947742 2.96126 indus 10 11 3831397 354249 -.7882245 -.0207191 4581948 4354034 -.1368309 3999631 4312873 2551421 (omitted) 244547 2716699 2524678 2610414 0.96 0.82 -3.09 0.338 0.411 0.002 -.4007737 -.4910586 -1.288294 1.167053 1.199557 -.2881551 -0.08 1.69 1.72 -0.52 0.932 0.092 0.085 0.600 -.5000225 -.0742684 -.0594244 -.6484627 4585842 9906579 9302312 3748009 _cons -.1440456 3841713 -0.37 0.708 -.8970076 6089163 sigma_u sigma_e rho 47025049 55074052 42165173 (fraction of variance due to u_i) 120 P>|z| [95% Conf Interval] 12 Robustness check of the independent variable H with the total sample Table 59: F-test result F test that all u_i=0: F(194, 519) = 3.57 Prob > F = 0.0000 Table 60: LM test result Breusch and Pagan Lagrangian multiplier test for random effects INFO[id,t] = Xb + u[id] + e[id,t] Estimated results: Var INFO e u Test: sd = sqrt(Var) 1.000952 3192878 2419721 1.000476 5650555 4919066 Var(u) = chibar2(01) = Prob > chibar2 = 121 98.79 0.0000 Table 61: Hausman test result Coefficients (b) (B) fe re H SIZE INDSIZE VOL 2007bn.year 2008.year 2009.year 2010.year 2011.year 1.114545 -1.40e-08 -3.74e-11 -1.46e-06 0643226 2095882 6268287 1.361809 1.407247 (b-B) Difference 5097383 -8.82e-09 1.42e-10 -2.20e-06 0202575 1980403 5339979 1.176213 1.216343 6048065 -5.15e-09 -1.80e-10 7.39e-07 0440651 0115479 0928308 1855963 190904 sqrt(diag(V_b-V_B)) S.E .4926333 3.58e-09 1.21e-10 2.04e-07 0354349 059104 0995519 1352844 1504128 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(6) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 12.00 Prob>chi2 = 0.0621 122 Table 62: Fixed effects regression result Fixed-effects (within) regression Group variable: id Number of obs Number of groups = = 723 195 R-sq: Obs per group: = avg = max = 3.7 within = 0.4947 between = 0.3784 overall = 0.4105 corr(u_i, Xb) F(8,194) Prob > F = 0.0341 = = (Std Err adjusted for 195 clusters in id) Robust Std Err INFO Coef t P>|t| [95% Conf Interval] H SIZE INDSIZE VOL 1.114545 -1.40e-08 -3.74e-11 -1.46e-06 4335053 6.18e-09 1.83e-10 3.31e-07 2.57 -2.26 -0.20 -4.40 0.011 0.025 0.838 0.000 2595564 -2.62e-08 -3.98e-10 -2.11e-06 1.969533 -1.78e-09 3.23e-10 -8.05e-07 year 2007 2008 2009 2010 2011 0643226 2095882 6268287 1.361809 1.407247 1093556 1378714 1939668 2428164 2672518 0.59 1.52 3.23 5.61 5.27 0.557 0.130 0.001 0.000 0.000 -.1513559 -.0623311 2442743 8829102 8801545 2800011 4815076 1.009383 1.840708 1.934339 _cons 4270946 1373722 3.11 0.002 1561598 6980294 sigma_u sigma_e rho 64676143 56505554 56711916 (fraction of variance due to u_i) 123 Table 63: Random effects regression result Random-effects GLS regression Group variable: id Number of obs Number of groups = = 723 195 R-sq: Obs per group: = avg = max = 3.7 within = 0.4912 between = 0.5096 overall = 0.4785 corr(u_i, X) Wald chi2(16) Prob > chi2 = (assumed) = = (Std Err adjusted for 195 clusters in id) Robust Std Err INFO Coef z P>|z| [95% Conf Interval] H SIZE INDSIZE VOL 5590321 -1.12e-08 2.33e-11 -2.02e-06 2602148 2.88e-09 1.70e-10 2.97e-07 2.15 -3.89 0.14 -6.81 0.032 0.000 0.891 0.000 0490205 -1.69e-08 -3.10e-10 -2.60e-06 1.069044 -5.58e-09 3.57e-10 -1.44e-06 year 2007 2008 2009 2010 2011 0452182 234053 6235705 1.319256 1.375436 1032975 1295821 1801786 2189657 2417996 0.44 1.81 3.46 6.02 5.69 0.662 0.071 0.001 0.000 0.000 -.1572413 -.0199233 2704269 8900911 9015178 2476777 4880292 9767141 1.748421 1.849355 indus 10 11 1895199 1188107 -.4079051 0598566 -.063971 6907432 348476 -.1796475 2299976 222947 2189176 2473642 1696671 2084483 198946 1825421 0.82 0.53 -1.86 0.24 -0.38 3.31 1.75 -0.98 0.410 0.594 0.062 0.809 0.706 0.001 0.080 0.325 -.261267 -.3181574 -.8369757 -.4249682 -.3965123 282192 -.0414509 -.5374235 6403068 5557789 0211655 5446815 2685704 1.099294 7384029 1781285 _cons 4498418 1945851 2.31 0.021 068462 8312216 sigma_u sigma_e rho 48214044 56505554 42131509 (fraction of variance due to u_i) 124 13 Robustness check of the independent variable H with the state joint stock firms Table 64: F-test result F test that all u_i=0: F(113, 294) = 3.31 Prob > F = 0.0000 Table 65: LM test result Breusch and Pagan Lagrangian multiplier test for random effects INFO[id,t] = Xb + u[id] + e[id,t] Estimated results: Var INFO e u Test: sd = sqrt(Var) 9560807 3279339 2502616 9777938 5726551 5002615 Var(u) = chibar2(01) = Prob > chibar2 = 125 40.67 0.0000 Table 66: Hausman test result Coefficients (b) (B) fe re H SIZE INDSIZE VOL 2007bn.year 2008.year 2009.year 2010.year 2011.year 1.092615 -1.36e-08 5.72e-11 -1.43e-06 -.0768717 0435191 501152 1.086756 1.268362 (b-B) Difference 3478207 -8.12e-09 2.22e-10 -2.32e-06 -.0611693 0896008 4510582 9453126 1.124813 744794 -5.50e-09 -1.64e-10 8.92e-07 -.0157023 -.0460818 0500937 1414429 1435489 sqrt(diag(V_b-V_B)) S.E 1.884636 4.57e-09 1.52e-10 2.78e-07 0558458 0799957 1255628 1632589 1782723 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(6) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 11.59 Prob>chi2 = 0.0718 126 Table 67: Fixed effects regression results Fixed-effects (within) regression Group variable: id Number of obs Number of groups = = 417 114 R-sq: Obs per group: = avg = max = 3.7 within = 0.4846 between = 0.3596 overall = 0.3876 corr(u_i, Xb) F(8,113) Prob > F = -0.0134 = = (Std Err adjusted for 114 clusters in id) Robust Std Err INFO Coef t P>|t| [95% Conf Interval] H SIZE INDSIZE VOL 1.092615 -1.36e-08 5.72e-11 -1.43e-06 1.890776 8.88e-09 2.38e-10 4.58e-07 0.58 -1.53 0.24 -3.12 0.565 0.128 0.811 0.002 -2.653354 -3.12e-08 -4.15e-10 -2.34e-06 4.838584 3.98e-09 5.29e-10 -5.20e-07 year 2007 2008 2009 2010 2011 -.0768717 0435191 501152 1.086756 1.268362 1304244 1696987 2342988 2882399 3129507 -0.59 0.26 2.14 3.77 4.05 0.557 0.798 0.035 0.000 0.000 -.3352659 -.2926846 0369637 5157003 6483499 1815226 3797227 9653402 1.657811 1.888373 _cons 4356781 4065155 1.07 0.286 -.3697025 1.241059 sigma_u sigma_e rho 65282971 57265512 56514393 (fraction of variance due to u_i) 127 Table 68: Random effects regression result Random-effects GLS regression Group variable: id Number of obs Number of groups = = 417 114 R-sq: Obs per group: = avg = max = 3.7 within = 0.4791 between = 0.4742 overall = 0.4535 corr(u_i, X) Wald chi2(15) Prob > chi2 = (assumed) = = (Std Err adjusted for 114 clusters in id) Robust Std Err INFO Coef z P>|z| [95% Conf Interval] H SIZE INDSIZE VOL 2424973 -9.21e-09 1.41e-10 -2.21e-06 3907795 4.10e-09 2.21e-10 5.33e-07 0.62 -2.25 0.64 -4.15 0.535 0.025 0.524 0.000 -.5234165 -1.72e-08 -2.92e-10 -3.26e-06 1.008411 -1.18e-09 5.74e-10 -1.17e-06 year 2007 2008 2009 2010 2011 -.0416693 1150614 5092913 1.040978 1.228342 1291698 1607026 2218143 2679945 2939735 -0.32 0.72 2.30 3.88 4.18 0.747 0.474 0.022 0.000 0.000 -.2948375 -.1999099 0745433 5157186 6521649 2114988 4300327 9440393 1.566238 1.80452 indus 10 11 3451194 3621347 0743096 3743605 1885247 5279751 0551435 2867646 2638486 3583612 277295 2246753 (omitted) 2494274 2387183 1.20 1.37 0.21 1.35 0.84 0.229 0.170 0.836 0.177 0.401 -.2169289 -.1549991 -.6280653 -.1691277 -.2518308 9071678 8792685 7766846 9178487 6288803 2.12 0.23 0.034 0.817 0391063 -.4127359 1.016844 5230228 _cons 2939015 239437 1.23 0.220 -.1753864 7631893 sigma_u sigma_e rho 49703672 57265512 42965976 (fraction of variance due to u_i) 128 14 Robustness check of the independent variable H with the private joint stock firms Table 69: F-test result F test that all u_i=0: F(99, 197) = 3.15 Prob > F = 0.0000 Table 70: LM test result Breusch and Pagan Lagrangian multiplier test for random effects INFO[id,t] = Xb + u[id] + e[id,t] Estimated results: Var INFO e u Test: sd = sqrt(Var) 1.041377 302181 230275 1.020479 54971 4798697 Var(u) = chibar2(01) = Prob > chibar2 = 129 41.37 0.0000 Table 71: Hausman test result Coefficients (b) (B) fe re H SIZE INDSIZE VOL 2007bn.year 2008.year 2009.year 2010.year 2011.year 1.264477 -8.10e-09 -3.35e-10 -1.45e-06 4440623 6677449 1.132576 2.081061 1.968005 (b-B) Difference 9300923 -9.35e-09 -5.35e-12 -2.25e-06 2528539 5015591 8204382 1.656618 1.549754 3343851 1.25e-09 -3.30e-10 7.95e-07 1912084 1661858 3121381 4244429 4182515 sqrt(diag(V_b-V_B)) S.E .5041744 6.46e-09 2.54e-10 3.03e-07 135479 1793219 2679428 35199 3878114 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(6) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 6.95 Prob>chi2 = 0.3252 130 Table 72: Fixed effects regression result Fixed-effects (within) regression Group variable: id Number of obs Number of groups = = 306 100 R-sq: Obs per group: = avg = max = 3.1 within = 0.5295 between = 0.3704 overall = 0.4336 corr(u_i, Xb) F(8,99) Prob > F = 0.0502 = = (Std Err adjusted for 100 clusters in id) Robust Std Err INFO Coef t P>|t| [95% Conf Interval] H SIZE INDSIZE VOL 1.264477 -8.10e-09 -3.35e-10 -1.45e-06 4493588 7.79e-09 3.68e-10 3.92e-07 2.81 -1.04 -0.91 -3.71 0.006 0.301 0.364 0.000 372852 -2.36e-08 -1.06e-09 -2.23e-06 2.156103 7.36e-09 3.94e-10 -6.76e-07 year 2007 2008 2009 2010 2011 4440623 6677449 1.132576 2.081061 1.968005 218975 2808576 4197617 5397837 6076391 2.03 2.38 2.70 3.86 3.24 0.045 0.019 0.008 0.000 0.002 0095684 1104625 299678 1.010013 7623173 8785563 1.225027 1.965475 3.152109 3.173693 _cons 1216201 2220908 0.55 0.585 -.3190562 5622963 sigma_u sigma_e rho 70928414 54970996 62474337 (fraction of variance due to u_i) 131 Table 73: Random effects regression result Random-effects GLS regression Group variable: id Number of obs Number of groups = = 306 100 R-sq: Obs per group: = avg = max = 3.1 within = 0.5252 between = 0.5990 overall = 0.5419 corr(u_i, X) Wald chi2(15) Prob > chi2 = (assumed) = = (Std Err adjusted for 100 clusters in id) Robust Std Err INFO Coef z P>|z| [95% Conf Interval] H SIZE INDSIZE VOL 1.058885 -1.29e-08 -2.53e-10 -1.92e-06 3433227 3.64e-09 3.07e-10 3.04e-07 3.08 -3.55 -0.82 -6.29 0.002 0.000 0.410 0.000 385985 -2.01e-08 -8.54e-10 -2.51e-06 1.731785 -5.80e-09 3.48e-10 -1.32e-06 year 2007 2008 2009 2010 2011 3523899 6404993 1.081128 2.029794 1.952925 1758489 2246257 3323303 4190481 4727486 2.00 2.85 3.25 4.84 4.13 0.045 0.004 0.001 0.000 0.000 0077323 200241 4297724 1.208475 1.026355 6970474 1.080758 1.732483 2.851113 2.879495 indus 10 11 3776159 3593328 -.8409514 -.0343544 5169926 4350747 -.0943465 3935642 4042144 2543532 (omitted) 2334348 2625907 2556728 260248 0.96 0.89 -3.31 0.337 0.374 0.001 -.3937556 -.4329129 -1.339475 1.148988 1.151579 -.3424283 -0.15 1.97 1.70 -0.36 0.883 0.049 0.089 0.717 -.4918783 0023242 -.0660348 -.6044232 4231694 1.031661 9361842 4157302 _cons 0974481 3216922 0.30 0.762 -.533057 7279532 sigma_u sigma_e rho 4693801 54970996 42166167 (fraction of variance due to u_i) 132 ... information Financial Intermediaries Information Intermediaries Regulators of capital markets and financial institutions Auditors and Accounting regulators Business Firms Figure 2.1: Capital and information. .. Auditor quality and information disclosure Good auditors could help reveal the financial information in their financial reports Dopuch and Simunic (1982) mention the role of auditor in reducing... INDUSTRIAL INFORMATION MARKET RELATED INFORMATION Figure 2.1: Corporate disclosure, informed trading and determinant factors 12 FIRM SPECIFIC INFORMATION 2.2.2 The relationship between ownership