- × DL)t−1 0.3942∗∗∗ 0.4221∗∗∗ 0.1670∗∗∗ 0.1941∗∗∗ (0.1037) (0.0737) (0.0178) (0.0263) ( Y K )t−1 0.0121 0.0001 0.0039∗∗∗ 0.0108∗∗∗ (0.0086) (0.0017) (0.0004) (0.0012) m1-8.69-12.06 m2 2.05 3.64 m3 2.05-1.35 R2 0.3679 0.1151 z1 610.44 (14) 4561.23 (15) 310.47 (15) 41.77 (15) t(γL − γS) 2.65 (1) 0.88 (1) 11.65 (1) 8.70 (1) (p-value) 0.1033 0.3482 0.0006 0.0032 Hansen 66.28 (85) 101.79 (85) (p-value) 0.006 0.104 Notes: Table 8 presents the investment estimations testing whether investment-cash flow sensitivity of the firms is robust to controlling firms’ size. Firms are categorized as small and large depending on whether they are below or above the median of total employment. t statistic testing the statistical significance of the equivalence in the estimated cash flow sensitivities across those sub-samples is reported. See notes in Table 7.
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- × DM )t−1 0.1380 0.2035 0.1314∗∗∗ 0.1450∗∗∗ (0.1391) (0.1280) (0.0146) (0.0295) ( Y K )t−1 0.0079 0.0004 0.0038∗∗∗ 0.0107∗∗∗ (0.0089) (0.0022) (0.0004) (0.0012) m1-8.18-11.85 m2 2.16 3.50 m3-1.39-1.22 R2 0.3667 0.1130 z1 580.39 (14) 4743.56 (15) 309.93 (15) 42.08 (15) t(γM − γY ) 0.37 (1) 2.52 (1) 0.18 (1) 0.001 (1) (p-value) 0.5456 0.1124 0.6672 0.9049 Hansen 80.85 (40) 11.73 (85) (p-value) 0.000 0.028 Notes: Table 10 presents the investment estimations testing whether investment-cash flow sensitivity of the firms is robust to controlling firms’ age. Mature firms are the ones that have been established before at least ten years ago; correspondingly, young companies are the ones that have been established less than ten years ago. t statistic testing the statistical significance of the equivalence in the estimated cash flow sensitivities across those sub-samples is reported. See notes in Table 7.
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- × DY )t−1 0.2333∗ 0.4468∗∗∗ 0.1314∗∗∗ 0.1407∗∗∗ (0.1224) (0.1031) (0.0146) (0.0220) ( CF K
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- Table 1: Shares of Industries in CBRT Database Panel A 1998 1999 2000 2001 2002 2003 Manufacturing 48 46.1 46.9 47 49 50 Transportation 4 4.3 4.5 5 5 4 Construction 13 13.1 13.3 13 12 10 Trade 21 20.6 19.1 19 19 19 Other 14 15.9 16.2 16 15 17 Panel B 1998 1999 2000 2001 2002 2003 Manufacturing 57 56.6 56.3 58 59 61 Transportation 15 14.8 14.9 13 12 11 Construction 10 6.8 7.4 8 7 6 Trade 6 6.2 7.3 7 7 8 Other 12 15.6 14.1 14 15 14 Panel C 1998 1999 2000 2001 2002 2003 Manufacturing 50 44.9 41.9 44 45 43 Transportation 9 6.9 9.4 11 10 11 Construction 10 10.1 10.2 10 11 10 Trade 8 8.7 9.7 10 9 10 Other 23 29.4 18.8 25 25 26 Notes: Table 1 presents the shares of industries recorded in CBRT database. In Panel A & B & C, the shares of industries depending on number of firms, total employment and total assets are presented, respectively.
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- Table 10: Investment Estimations Controlling Firms’ Age Dependent variable: ( I K )i,t (Diff. GMM) (Sys. GMM) (OLS) (FE) ( I K )t−1 0.7208∗∗∗ 0.8724∗∗∗ 0.5791∗∗∗ 0.1832∗∗∗ (0.1685) (0.1112) (0.0198) (0.0253) ( I K )2 t−1 −1.0318∗∗ −1.1807∗∗∗ -0.3342∗∗∗ -0.1300∗∗ (0.4570) (0.2991) (0.0520) (0.0619) (CF K
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- Table 11: Investment Estimations Controlling Possible Risk of Bankruptcy Dependent variable: ( I K )i,t (Diff. GMM) (Sys. GMM) (OLS) (FE) ( I K )t−1 0.8382∗∗∗ 0.6980∗∗∗ 0.4999∗∗∗ 0.1226∗ (0.2379) (0.1845) (0.0591) (0.1348) ( I K )2 t−1-1.1499-0.4846 −0.3120∗∗ -0.1608 (0.8295) (0.6715) (0.1303) (0.1348) ( CF K )t−1 0.2828∗∗ 0.1548 0.1016∗∗∗ 0.1248∗∗∗ (0.1388) (0.1174) (0.0293) (0.0399) ( Y K )t−1 0.0146∗∗ 0.0009 0.0027∗∗ 0.0060∗ (0.0059) (0.0028) (0.0011) (0.0031) m1-6.91-8.22 m2-3.06 3.58 m3-0.50-0.40 R2 0.2275 0.1438 z1 205.55 (13) 1929.37 (14) 26.82 (14) 8.30 (14) Hansen 52.82 (32) 103.94 (68) (p-value) 0.012 0.003 Notes: Table 11 presents the investment estimations controlling possible risk of bankruptcy. See notes in Table 7.
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- Table 2: Representativeness of CBRT Database for Manufacturing Industry Year Total Employment Total Employment % (A) (B) 1997 779730 987960 78 1998 758016 1058844 71 1999 721134 975667 73 2000 752333 1001304 75 2001 747981 977256 76 Notes: In Table 2 A represents the total employment of private manufacturing firms with 10+ employees that are recorded in CBRT database. B represents the total employment of private manufacturing firms with 10+ employees that are surveyed by TurkStat.
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- Table 3: Summary Statistics: All Firms Sample Period:1992-2003 # Obs. Mean S.D. Median Sales 30922 3687.61 21375.51 958.43 Total assets 30922 3031.03 13181.79 599.51 Fixed assets 30922 1898.37 9541.19 231.31 Investment 30922 267.91 2268.89 21.76 Net income 30922 96.92 1581.74 14.26 Cash stock 31243 234.33 2261.86 19.49 Cash Stock+ Net income 30850 336.82 3394.85 42.96 Leverage (%) 30922 0.54 0.67 0.54 Age (years) 30922 13.74 6.77 13 Employment 30922 181.53 4101.54 60 Notes: In Table 3 sales, total assets, fixed assets, investment, net income, cash stock and cash stock plus net income are all deflated using output price indices at the sub-industry level. They are in billions New Turkish Liras. Leverage is equal to debt-assets ratio. Age is calculated as the number of years passed since establishment. Employment is equal to total number of employees.
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- Table 8: Investment Estimations Controlling Firms’ Size Based on Total Employment Dependent variable: ( I K )i,t (Diff. GMM) (Sys. GMM) (OLS) (FE) ( I K )t−1 0.8300∗∗∗ 0.8554∗∗∗ 0.5767∗∗∗ 0.1830∗∗∗ (0.1666) (0.1072) (0.0198) (0.0252) ( I K )2 t−1 −1.3545∗∗∗ −1.082∗∗∗ −0.3342∗∗∗ −0.1315∗∗ (0.4642) (0.3016) (0.0515) (0.0614) ( CF K
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- Table 9: Investment Estimations Controlling Firms’ Size Based on Total Assets Dependent variable: ( I K )i,t (Diff. GMM) (Sys. GMM) (OLS) (FE) ( I K )t−1 0.7345∗∗∗ 0.8538∗∗∗ 0.5780∗∗∗ 0.1836∗∗∗ (0.1635) (0.1044) (0.0197) (0.0252) ( I K )2 t−1 −1.042∗∗ −1.0068∗∗∗ −0.3332∗∗∗ −0.1307∗∗ (0.4588) (0.2965) (0.0515) (0.0615) ( CF K
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- Table A.2: Size and Age Distribution Panel A: Size Distribution Number Small 2610 Large 1949 Panel B: Size Distribution Number Small 2467 Large 2092 Panel C: Age Distribution Number 0-10 1965 11-20 1934 21-30 660 Notes: In Table A.2 Panel A & B present the distributions of manufacturing firms based on size measured as total employment and total assets, respectively.
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- Table A.3: Regional Distribution Region Number Istanbul 1850 West Marmara 157 Agean 838 East Marmara 583 West Anatolia 372 Mediterranean 269 Central Anatolia 112 West Black Sea 132 East Black Sea 80 North East Anatolia 14 Central East Anatolia 28 South East Anatolia 124 Notes: Provincial information is present in CBRT database. In Table A.3 firms are classified according to regions determined by TurkStat.
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- Table A.5: Panel Structure Number of annual observations 3 4 5 6 7 8 9 10 11 12 Number of firms 919 651 475 353 264 289 449 366 309 484 Notes: In Table A.5 the distribution of the firms by the number of consecutive years of data available throughout the period 1992-2003 is shown.
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