How does capital structure affect firm’s market competitiveness?

Figures & data

Table 1. Description of research variables

Variables	Symbol	Expected	Definition
Dependent variable
$HH{I}_{it}$	Competitive enterprise		HHIi = ∑(xi/∑xj)^2; xi- sales of firm; xj- sales of industry
Independent variables
DRit	Debt ratio	-	Debt ratio = total liabilities/total assets
$SIZ{E}_{it}$	Firm size	±	Ln (total assets)
$GRT{A}_{it}$	Growth of total assets	+	(Total assetst − total assetst-1) /total assetst-1
$C{R}_{it}$	Current liquidity	-	Current assets/current liabilities

Table 2. Summary statistics

VarName	Obs	Mean	SD	Min	Max
HHI	5051	0.022	0.057	0.000	0.236
DR	5052	0.497	0.217	0.111	0.839
SIZE	5052	26.962	1.493	22.780	31.991
GRTA	4476	0.095	0.195	−0.193	0.591
CR	5052	1.955	1.350	0.707	5.942

Figure 1. Debt ratio follows industry

Table 3. Describe the industry

No	Name	Total
1	Industrial Products	254
2	Information and Telecommunication	21
3	Pharmaceutical & Health Care	21
4	Oil & Gas	6
5	Consumer Service	54
6	Consumer Goods	95
7	Raw Materials	89
8	Community Utilities	34
Total		574

Table 4. Results of general regression analysis for all enterprises

	(1)	(2)	(3)
HHI	FEM	REM	GMM
HHIt-1			0.844***
			(0.0462)
DR	0.0147	0.0176	0.411***
	(0.0124)	(0.0124)	(0.110)
DR2	−0.0102	−0.0162	−0.353***
	(0.0117)	(0.0116)	(0.102)
SIZE	0.00480***	0.00858***	−0.00283
	(0.000726)	(0.000649)	(0.00245)
GRTA	0.00190	0.000328	−0.00652
	(0.00153)	(0.00154)	(0.0141)
CR	−0.000254	−0.000264	0.0154***
	(0.000482)	(0.000483)	(0.00592)
Constant	−0.112***	−0.214***	−0.0522
	(0.0197)	(0.0178)	(0.0742)
Observations	4,476	4,476	4,473
Number of id	575	575	574
Hausman test	0.0000
Heteroskedasticity	0.0000
Autocorrelation	0.000
AR(2)			0.100
Hansen test			0.144

Standard errors in parentheses

*** p < 0.01, ** p < 0.05, * p < 0.1

Table 5. Analysis results by industry

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
HHI	Industrial Products	Information and Telecommunication	Pharmaceutical & Health Care	Oil & Gas	Consumer Service	Consumer Goods	Raw Materials	Community Utilities
HHIt-1	0.632***	1.007***	0.858***	1.282*	0.961***	0.874***	0.907***	0.843***
	(0.00752)	(0.0133)	(0.00716)	(0.770)	(0.000401)	(0.00785)	(0.0219)	(0.00125)
DR	−1.261***	−0.0901***	−0.00167	-	0.330***	−0.112***	0.114*	0.0858***
	(0.0773)	(0.0123)	(0.0180)	-	(0.00306)	(0.0353)	(0.0668)	(0.000965)
DR2	0.933***	0.101***	0.106***	1.170	−0.275***	0.0594**	−0.0615	−0.150***
	(0.0611)	(0.0117)	(0.0237)	(1.351)	(0.00181)	(0.0284)	(0.0533)	(0.00135)
SIZE	0.0287***	0.00584***	0.00427***	0.316	−0.00801***	0.00214***	−0.00692***	0.0165***
	(0.00190)	(0.000691)	(0.00106)	(0.260)	(6.00e-05)	(0.000411)	(0.00108)	(6.06e-05)
GRTA	0.0523***	0.0754***	0.0620***	−0.537	0.0668***	0.0944***	0.0406***	0.0295***
	(0.00467)	(0.00165)	(0.00167)	(0.430)	(0.000142)	(0.00276)	(0.00268)	(0.000259)
CR	−0.023***	0.00541***	0.00833***	0.280	0.0163***	−0.00996***	−0.00925***	−0.00679***
	(0.00369)	(0.000792)	(0.000581)	(0.345)	(0.000232)	(0.00157)	(0.00312)	(3.68e-05)
Constant	−0.362***	−0.153***	−0.151***	−10.14	0.0867***	−0.0104	0.167***	−0.439***
	(0.0507)	(0.0167)	(0.0287)	(8.674)	(0.00270)	(0.0178)	(0.0397)	(0.00168)
Observations	1,996	168	166	47	416	725	684	271
Number of id	254	21	21	6	54	95	89	34

Standard errors in parentheses

*** p < 0.01, ** p < 0.05, * p < 0.1