SEEU Review vol. 5 Nr. 2 (pdf) - South East European University

SEEU Review Volume 5, No. 2, 2009
Table 4: Correlation matrix-Slovenian listed companies
Lev Tang Profit Size Nonde Growth
bttax
Lev 1.0000
Tang 0.2826 1.0000
Profit -0.5700 0.1160 1.0000
Size 0.3865 0.1441 0.1416 1.0000
Nondebttax -0.3507 0.0242 0.4091 0.2671 1.0000
Growth 0.1708 -0.0715 -0.0715 0.2146 0.0685 1.0000
To test hypotheses that we formulated above, we perform regression test.
Results below (table 5 and table 6) show that while tangibility, profitability
and non-debt tax shield are negatively correlated with leverage in
Macedonian listed companies, profitability and non-debt tax shield are
negatively correlated with leverage in Slovenian listed companies. But,
growth and size are positively correlated for both, Macedonian and
Slovenian listed companies.
P>|t| provides an alternative approach to reporting the significance or
regression coefficients. The figures in columns below (table 5 and table 6)
give the probability of obtaining the corresponding t statistics as a matter of
β 1,
2, 3, 4, 5
chance, if null hypothesis Ho: = 0 were true. A p-value of less than
0.01 means that the probability is less than 1 percent, which in turn means
that the null hypothesis would be rejected at the 1 percent level; a p value
between 0.01 and 0.05 means that the null hypothesis would be rejected at
the 5 percent, but not the 1 percent level; and a p-value of 0.05 or more
means that it would not be rejected at the 5 percent level (Dougherty, 2002).
Usually, p-values of 0.05 or lower are considered low enough for researcher
to be confident that the estimated is statistically significant.
Table 5 shows that p-value of tangibility is 0.075. This means that there
are only 750 in 10,000 chances that the true coefficient of tangibility is
actually zero. So, the coefficient of tangibility implies that it is statistically
significant at the 7.5 percent level. Thus, we can say that based on p-values,
in our model for Macedonian listed companies just profitability is
statistically significant, and rest determinants are statistically insignificant.
This is verified also by t-statistics.
Results in table 5 show that t-statistics for parameters estimated are lower
than 2 in absolute values, except profitability. This is in conformity with rule
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