Proceedings

For the analysis model of financial leverage (dependent variable), return on
operational income to total assets, the rate of tangible assets and turnover
(independent variables), the results are reflected in the following table:
Table 3. Relationship between FL, ROIA, TAR and turnover
Dependent Variable: FL?
Method: Pooled EGLS (Cross-section weights)
Sample: 2005 2009
Number of included observations: 5
Crossed observations: 46
Total observations: 230
Weighted variables matrix as linear estimation in a single step
Variable Coefficient Std. Error t-Statistic Prob.
C -4.423280 0.774168 -5.713592 0.0000
ROIA? -2.456691 0.539234 -4.555892 0.0000
TAR? 0.471362 0.216578 2.176411 0.0306
LOGTO? 0.595256 0.093495 6.366696 0.0000
Weighted Statistics
R-squared 0.190355 Mean dependent var 3.323127
Adjusted Rsquared 0.179607 S.D. dependent var 3.434845
S.E. of regression 3.424266 Sum squared resid 2649.986
F-statistic 17.71151 Durbin-Watson stat 0.547392
Prob(F-statistic) 0.000000
Unweighted Statistics
R-squared 0.014572 Mean dependent var 1.345409
Sum squared resid 5138.623 Durbin-Watson stat 2.345460
(Source: authors’ own calculations generated by using the Eviews7 soft)
Consequently, the following observations can be drawn:
� The standard error values of the regression function coefficients are lower, in
module, than the coefficients` values, which imply that their estimate is
correct, also reasoned by the low values of probabilities.
� The correlation coefficient shows that 19.03% of the changes in ER, rate of
tangible assets and turnover are reflected in financial leverage.
� The model`s coefficients indicate that a 1% change of ER leads to a change of
-2.45% for the financial leverage, a 1% change in the Tar causes a change of
0.47% for the financial leverage, and an amendment to 1 % of turnover results
in a change of 0.59% of the financial leverage.
� Durbin-Watson test indicates a partial correlation between the residual
variables (0.54).
For the analysis model of financial leverage (dependent variable), the rate of
tangible assets, market-to-book ratio and turnover (independent variables), the results
are reflected in the following table 4.
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