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Table 5. 
Financing Constraints and Outward Foreign Direct Investment Decisions: Sample Splits
VariableSmall (1)Small (2)Large (3)Large (4)Joint Venture (5)Joint Venture (6)Wholly Owned Subsidiary (7)Wholly Owned Subsidiary (8)Excluding Tax Havens (9)(10)
Cash flowt−1 0.374  0.723***  0.692***  0.737***  0.699***  
 (0.262)  (0.108)  (0.172)  (0.123)  (0.117)  
Liquidityt−1  0.264  0.873***  0.662***  0.871***  0.854*** 
  (0.306)  (0.136)  (0.169)  (0.151)  (0.146) 
Sizet−1     0.213 0.0842 −0.0747 −0.296 −1.064* −1.527** 
     (0.145) (0.196) (0.231) (0.231) (0.546) (0.641) 
Debt ratiot−1 −0.566 −0.833* 0.616** −0.136 −0.228** −0.204* −0.130 −0.111 −0.174** −0.163** 
 (0.482) (0.500) (0.283) (0.247) (0.108) (0.114) (0.0824) (0.0831) (0.0767) (0.0764) 
Age −0.0391 −0.0500 −0.184** −0.219** −1.685** −1.386* −1.009* −1.381** 0.0530 0.0437 
 (0.141) (0.140) (0.0923) (0.0925) (0.761) (0.740) (0.590) (0.675) (0.0346) (0.0345) 
TFPt−1 0.107** 0.0971** 0.0790** 0.0654* −0.00731 −0.0106 0.0754** 0.0685** 0.427*** 0.395** 
 (0.0460) (0.0467) (0.0399) (0.0390) (0.0649) (0.0670) (0.0320) (0.0314) (0.142) (0.154) 
Exporter 0.444* 0.460 0.271 0.284 0.598** 0.598** 0.398** 0.365** −0.271*** −0.135 
 (0.248) (0.294) (0.184) (0.199) (0.235) (0.249) (0.157) (0.171) (0.0984) (0.104) 
Business group −0.296 −0.230 −0.427*** −0.322*** −0.197 −0.0947 −0.344*** −0.196* −0.0744 −0.289 
 (0.211) (0.186) (0.115) (0.111) (0.144) (0.155) (0.106) (0.115) (0.219) (0.222) 
Time dummies Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 
Wald Chi 28.84 26.45 134.71 133.62 82.44 74.29 301.70 278.73   
Prob. > Chi2 0.0042 0.0093 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 
Observations 2,991 2,991 2,654 2,654 5,378 5,378 5,578 5,578 5,600 5,600 
VariableSmall (1)Small (2)Large (3)Large (4)Joint Venture (5)Joint Venture (6)Wholly Owned Subsidiary (7)Wholly Owned Subsidiary (8)Excluding Tax Havens (9)(10)
Cash flowt−1 0.374  0.723***  0.692***  0.737***  0.699***  
 (0.262)  (0.108)  (0.172)  (0.123)  (0.117)  
Liquidityt−1  0.264  0.873***  0.662***  0.871***  0.854*** 
  (0.306)  (0.136)  (0.169)  (0.151)  (0.146) 
Sizet−1     0.213 0.0842 −0.0747 −0.296 −1.064* −1.527** 
     (0.145) (0.196) (0.231) (0.231) (0.546) (0.641) 
Debt ratiot−1 −0.566 −0.833* 0.616** −0.136 −0.228** −0.204* −0.130 −0.111 −0.174** −0.163** 
 (0.482) (0.500) (0.283) (0.247) (0.108) (0.114) (0.0824) (0.0831) (0.0767) (0.0764) 
Age −0.0391 −0.0500 −0.184** −0.219** −1.685** −1.386* −1.009* −1.381** 0.0530 0.0437 
 (0.141) (0.140) (0.0923) (0.0925) (0.761) (0.740) (0.590) (0.675) (0.0346) (0.0345) 
TFPt−1 0.107** 0.0971** 0.0790** 0.0654* −0.00731 −0.0106 0.0754** 0.0685** 0.427*** 0.395** 
 (0.0460) (0.0467) (0.0399) (0.0390) (0.0649) (0.0670) (0.0320) (0.0314) (0.142) (0.154) 
Exporter 0.444* 0.460 0.271 0.284 0.598** 0.598** 0.398** 0.365** −0.271*** −0.135 
 (0.248) (0.294) (0.184) (0.199) (0.235) (0.249) (0.157) (0.171) (0.0984) (0.104) 
Business group −0.296 −0.230 −0.427*** −0.322*** −0.197 −0.0947 −0.344*** −0.196* −0.0744 −0.289 
 (0.211) (0.186) (0.115) (0.111) (0.144) (0.155) (0.106) (0.115) (0.219) (0.222) 
Time dummies Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 
Wald Chi 28.84 26.45 134.71 133.62 82.44 74.29 301.70 278.73   
Prob. > Chi2 0.0042 0.0093 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 
Observations 2,991 2,991 2,654 2,654 5,378 5,378 5,578 5,578 5,600 5,600 

TFP = total factor productivity.

Notes: This table reports the results of an ivprobit model for the probability of a firm investing abroad based on firm size, excluding firms investing in tax havens such as Mauritius and Cyprus in columns (9) and (10). Cash flow, size, age, and TFP are measured in logs. Exporter is a dummy for export status. Standard errors are reported in parentheses. ***, **, and * denote significance at the 1%, 5%, and 10% level, respectively.

Source: Authors’ calculations.

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