Date: April 12, 2013 Topic: The Shrinking ... - Georgetown Law

Table 3. Panel data regression models of corporate legal services make and buy balance
No of lawyers
Dep. Variable
In-house lawyers
(count)
(1) (2) (3) (4) (5) (6) (7) (8)
Lagged dep. variable
Fixed
effects
Fixed
effects
System
GMM
System
GMM
System
GMM
System
GMM
0.310** 0.305** 0.973** 0.882** 0.883** 0.882**
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
Fixed
effects
Poisson
Random
effects
Poisson
Explanatory variables
No of countries (log)
0.055 0.041** 0.040** 0.039** 0.043 0.270**
(0.818) (0.005) (0.008) (0.008) (0.661) (0.000)
R&D intensity
2.878* 0.770 † 0.764 † 0.912 † 0.518 † 2.407**
(0.028) (0.072) (0.078) (0.051) (0.068) (0.000)
Advertising intensity
0.350 2.442* 2.389* 2.469* 1.636* 1.240*
(0.778) (0.012) (0.012) (0.017) (0.013) (0.049)
General counsel in TMT
0.090* 0.090 † 0.090 † 0.0938 † 0.180** 0.161**
(0.034) (0.094) (0.079) (0.082) (0.000) (0.000)
No of law firms (log)
0.023 0.041 † 0.041 † 0.0389 † 0.019** 0.014*
(0.112) (0.069) (0.072) (0.076) (0.000) (0.017)
Control variables
Product diversification
0.006 0.021 0.022 0.000 0.0301 0.103**
(0.937) (0.653) (0.641) (0.990) (0.236) (0.000)
Debt ratio
-0.139 -0.213 -0.179 -0.229 -0.218 -0.234 -0.405* -0.605**
(0.686) (0.562) (0.132) (0.165) (0.200) (0.144) (0.010) (0.000)
Profitability
-1.092** -1.026** -0.444* -0.346* -0.343* -0.290 † -0.057 -0.227**
(0.000) (0.000) (0.037) (0.029) (0.045) (0.075) (0.486) (0.006)
No of employees (log)
-0.344** -0.344** 0.003 -0.009 -0.010 -0.012 -0.000 -0.024
(0.000) (0.000) (0.825) (0.593) (0.553) (0.502) (0.995) (0.356)
Selling, general & admin -0.118** -0.117** -0.018 -0.040** -0.040** -0.035* 0.093** -0.049**
expenses (log)
(0.005) (0.005) (0.204) (0.008) (0.007) (0.032) (0.000) (0.000)
No of litigation cases
-0.028 + -0.040* 0.065 0.046 0.047 0.053 0.000 -0.010
(0.096) (0.013) (0.169) (0.141) (0.132) (0.106) (0.923) (0.175)
No of litigation cases t-1
-0.021 -0.009 -0.014 -0.012 -0.012 -0.059 † -0.010 -0.000
(0.529) (0.765) (0.746) (0.722) (0.730) (0.084) (0.174) (0.922)
No of acquisitions
-0.003 -0.012 -0.030 -0.055 † -0.055 † -0.079* -0.004 -0.019+
(0.911) (0.722) (0.369) (0.088) (0.089) (0.020) (0.682) (0.057)
No of acquisitions -1
-0.034 -0.035 -0.014 -0.029 -0.028 -0.0301 -0.018* -0.027**
(0.270) (0.266) (0.683) (0.380) (0.391) (0.440) (0.036) (0.002)
Bankruptcy
-0.463* -0.467* -0.480 -0.389 -0.382 0.0210 -0.0228
(0.049) (0.045) (0.411) (0.344) (0.356) (0.625) (0.601)
Sales (log)
0.141** 0.331**
(0.000) (0.000)
Constant
5.952** 5.658** 0.325 0.674* 0.676* 0.680* 0.264
(0.000) (0.000) (0.257) (0.012) (0.013) (0.012) (0.339)
Year dummies Yes Yes Yes Yes Yes Yes Yes Yes
N (number of firms) 945(285) 945(285) 945(285) 945(285) 945(285) 921(280) 945(285) 945(285)
Wald x 2 (R 2 ) (0.344) (0.361) 3119.9 4885.9 5060.1 5006.39 218.64 347.7
Arellano-Bond test AR(1) -3.80** -4.15** -3.97** -4.10**
Arellano-Bond test AR(2) 0.31 0.23 0.23 -0.42
No of instruments 126 249 249 248
Hansen test 106.2 224.74 224.74 214.95
p-values in parentheses, † p ≤ 10%, * p ≤ 5%, ** p ≤1%
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