Does Enforcement of Intellectual Property Rights Matter in China ...

Table 2: The effect of IP rights enforcement on access to new debt
The dependent variable is an indicator that takes the value of one if there is a net increase of debt for firm i in a given year which
exceeds 5% of its total assets, and zero otherwise. For a description of all the other variables, see Appendix 3. All regressions
include industry dummies as part of the control variables. All the independent variables are lagged by one year. For Columns (1),
(2), (4) and (5), the reported coefficients are probit estimates of the effect of marginal change in the corresponding regressors on
the probability of access to new debt, computed at the sample mean of the independent variables. Column (3) and (6) present
results obtained from the 2SLS regression, with the instruments being the provincial number of Christian colleges by 1920
(Christian Colleges) and the dummy which equals 1 when a province had a British concession during the late Qing Dynasty
(British Settlement). Other covariates in the first-stage regression are omitted for presentational convenience. The numbers in the
parentheses are z-stat based on standard errors adjusted for heteroskedasticity and the potential clustering of the residual at the
provincial level. ***, **, * indicate the coefficient is statistically different from zero at the 1-, 5-, and 10-percent level, respectively.
(1) (2) (3) (4) (5) (6)
Model Probit Probit
2SLS: Second
2SLS: Second
Probit Probit
stage
stage
Dependent variables
Access to Access to Access to new Access to Access to Access to new
new debt new debt debt new debt new debt debt
IPP1 0.127 0.109 0.318
(4.45)*** (3.56)*** (2.11)**
IPP2 0.001 0.002 0.004
(2.22)** (2.22)** (2.81)***
Corruption Control -0.003 -0.002 -0.009 -0.013
(-1.23) (-0.57) (-2.74)*** (-3.33)***
Banking Development 0.004 -0.001 0.004 0.006
(1.32) (-0.32) (1.54) (2.07)**
GDP Growth 0.208 -0.008 0.750 0.795
(0.77) (-0.03) (2.43)** (2.60)***
University 0.0003 0.0003 0.0004 0.0003
(1.46) (1.99)** (1.83)* (1.52)
Metropolis -0.003 -0.003 -0.001 -0.013
(-0.22) (-0.28) (-0.06) (-0.89)
Patent Dummy 0.037 0.036 0.038 0.036 0.036 0.036
(4.50)*** (4.36)*** (4.58)*** (4.21)*** (4.17)*** (4.21)***
R&D Intensity 0.219 0.216 0.216 0.226 0.563 0.218
(6.78)*** (6.68)*** (6.84)*** (6.74)*** (6.67)*** (6.67)***
Sales Growth 0.006 0.006 0.006 0.006 0.006 0.005
(7.74)*** (7.74)*** (7.44)*** (7.25)*** (7.23)*** (7.13)***
Intangible/TA -0.103 -0.104 -0.100 -0.110 -0.108 -0.105
(-3.43)*** (-3.44)*** (-3.41)*** (-3.53)*** (-3.47)*** (-3.49)***
ROA 0.068 0.063 0.066 0.065 0.060 0.063
(2.29)** (2.14)** (2.26)** (2.10)** (1.94)* (2.09)**
Leverage -0.052 -0.053 -0.051 -0.050 -0.051 -0.049
(-3.90)*** (-3.98)*** (-3.94)*** (-3.57)*** (-3.69)*** (-3.59)***
Log(assets) -0.003 -0.003 -0.002 -0.002 -0.002 -0.001
(-0.97) (-1.16) (-0.89) (-0.54) (-0.75) (-0.49)
Log(age) -0.058 -0.059 -0.055 -0.064 -0.064 -0.062
(-12.22)*** (-12.26)*** (-10.87)*** (-12.84)*** (-12.67)*** (-12.58)***
Observations 23,955 23,955 23,955 21,783 21,783 21,783
Pseudo R 2 / R 2 1.72% 1.74% 2.18% 1.83% 1.89% 2.59%
First Stage
Regression
First Stage
Regression
Dependent variables IPP1 IPP2
Christian Colleges 0.025 0.545
(21.14)*** (11.43)***
British Settlement 0.014 4.698
(6.49)*** (53.57)***
Observations 23,955 21,783
R-squared 19.05% 52.89%
Partial F-test of IVs 513.49(p=0.00) 2,636.71(p=0.00)
J stat. from
overidentification test
0.045(p=0.832) 2.239 (p=0.135)
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