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Table 6. 
Financing Constraints and Outward Foreign Direct Investment Share: 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 0.005  0.022**  0.006  0.028***  0.021*  
 (0.009)  (0.008)  (0.008)  (0.008)  (0.008)  
Liquidityt−1  0.015  0.028**  0.034*  0.032*   
  (0.011)  (0.010)  (0.0113)  (0.012)  0.033* 
          (0.013) 
Sizet−1     0.066 −0.049 0.011 −0.011 0.044 −0.006 
     (0.043) (0.059) (0.042) (0.057) (0.043) (0.916) 
Age 0.002 0.002 −0.044* −0.046** −0.027* −0.028* −0.022* −0.022* −0.028* −0.028* 
 (0.016) (0.016) (0.017) (0.017) (0.012) (0.012) (0.012) (0.012) (0.013) (0.013) 
TFPt−1 0.032*** 0.032*** 0.014* 0.013 0.003 0.002 0.010* 0.010* 0.014** 0.013** 
 (0.006) (0.006) (0.008) (0.008) (0.005) (0.005) (0.005) (0.005) (0.005) (0.005) 
Exporter 0.015 0.011 0.029 0.029 0.014 0.010 0.008 0.007 0.017 0.015 
 (0.017) (0.018) (0.028) (0.028) (0.016) (0.016) (0.015) (0.016) (0.016) (0.016) 
Business group 0.014 0.013 −0.007 −0.005 0.0007 0.003 −0.008 −0.002 −0.003 0.002 
 (0.017) (0.017) (0.018) (0.018) (0.014) (0.014) (0.013) (0.013) (0.014) (0.014) 
Debt ratiot−1 −0.006 −0.006 −0.011* −0.013** −0.014 −0.011 −0.020 −0.025 −0.026 −0.028 
 (0.018) (0.018) (0.045) (0.044) (0.018) (0.018) (0.017) (0.017) (0.150) (0.018) 
Time dummies Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 
Wald Chi 47.93 49.53 30.76 31.25 34.92 41.16 52.68 46.45 61.22 61.14 
Rho     .1186 .1197 0.102 0.105 0.190 0.193 
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 0.005  0.022**  0.006  0.028***  0.021*  
 (0.009)  (0.008)  (0.008)  (0.008)  (0.008)  
Liquidityt−1  0.015  0.028**  0.034*  0.032*   
  (0.011)  (0.010)  (0.0113)  (0.012)  0.033* 
          (0.013) 
Sizet−1     0.066 −0.049 0.011 −0.011 0.044 −0.006 
     (0.043) (0.059) (0.042) (0.057) (0.043) (0.916) 
Age 0.002 0.002 −0.044* −0.046** −0.027* −0.028* −0.022* −0.022* −0.028* −0.028* 
 (0.016) (0.016) (0.017) (0.017) (0.012) (0.012) (0.012) (0.012) (0.013) (0.013) 
TFPt−1 0.032*** 0.032*** 0.014* 0.013 0.003 0.002 0.010* 0.010* 0.014** 0.013** 
 (0.006) (0.006) (0.008) (0.008) (0.005) (0.005) (0.005) (0.005) (0.005) (0.005) 
Exporter 0.015 0.011 0.029 0.029 0.014 0.010 0.008 0.007 0.017 0.015 
 (0.017) (0.018) (0.028) (0.028) (0.016) (0.016) (0.015) (0.016) (0.016) (0.016) 
Business group 0.014 0.013 −0.007 −0.005 0.0007 0.003 −0.008 −0.002 −0.003 0.002 
 (0.017) (0.017) (0.018) (0.018) (0.014) (0.014) (0.013) (0.013) (0.014) (0.014) 
Debt ratiot−1 −0.006 −0.006 −0.011* −0.013** −0.014 −0.011 −0.020 −0.025 −0.026 −0.028 
 (0.018) (0.018) (0.045) (0.044) (0.018) (0.018) (0.017) (0.017) (0.150) (0.018) 
Time dummies Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 
Wald Chi 47.93 49.53 30.76 31.25 34.92 41.16 52.68 46.45 61.22 61.14 
Rho     .1186 .1197 0.102 0.105 0.190 0.193 
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 marginal effects of a random-effects Tobit model based on firm size, excluding firms investing in tax havens such as Mauritius and Cyprus in columns (9) and (10). Cashflow, size, age, and TFP are measured in logs. The dependent variable is the share of outward foreign direct investment to total capital assets. 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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