Why did some firms perform better in the global financial crisis?

Figures & data

Table 1. Previous works on crisis and performance.

Level	Author	Period	Research purposes	Country/sample	Results
Bank+industry+macroeconomic	Dietrich and Wanzenried (2011)	1999–2009	Examine how bank-specific characteristics, and industry-specific and macroeconomic factors affect the profitability of banks.	372 commercial banks in Switzerland	Operationally efficient banks are more profitable than banks that are less operationally efficient. State-owned banks are more profitable than privately owned banks.
Bank	Jin et al. (2011)	2006–2007	Examine whether and how accounting and audit variables provided indications of subsequent bank failure during a crisis.	U.S. banks	Banks audited by reputable auditors have lower probability of failure. The U.S. banking crisis was driven by credit problems.
Bank	Aebi et al. (2012)	2006–2008	Whether corporate governance mechanisms are associated with a better performance during the financial crisis of 2007/2008.	U.S. banks	Corporate governance variables are insignificant to banks’ performance during the crisis.
Bank	Akhigbe et al. (2012)	2007	Examine bank characteristics that may be effective indicators of a bank’s susceptibility to the financial crisis.	288 U.S. bank	Banks with more capital experienced more severe stock price declines, and higher betas and stock volatility levels during the crisis.
Firm/Bank	Erkens, Hung, and Matos (2012)	2007–2008	Probe the influence of corporate governance on firms’ performance.	296 financial firms from 30 countries	Firms with more independent boards and higher institutional ownership experienced worse stock returns during the crisis.
Bank	Beltratti and Stulz (2012)	2006	Examine the importance of factors that have been put forth as having contributed to the poor performance during the credit crisis.	Banks around the world	Banks with more shareholder-friendly boards performed saliently worse during the crisis than other banks.
Bank	Kollmann, Ratto, Roeger, and Veld (2013)	1995–2011	Analyse the impact of Euro Area bank asset losses, government support, and conventional fiscal stimulus measures.	Banks of Euro Area countries	Support for banks had a stabilising effect on Euro Area output, consumption, and investment.
Firm	Mitton (2002)	1997–1998	Analysis of the impact of corporate governance on firm performance during the Asian financial crisis.	398 firms from five Asian countries	Saliently better stock price performance is associated with firms that had indicators of higher disclosure quality, and with firms that had higher outside ownership concentration.
Firm	Kim and Lee (2003)	1997–1998	Examine whether agency problems explain the performance of Korean firms during the Asian crisis and did agency problems explain the performance differently for Chaebol vs. non-Chaebol firms.	590 Korean firms	Corporate governance matters in determining the role of agency problems. The explanatory power of agency problems is different for Chaebol firms, compared with non-Chaebol firms.
Firm	Baek et al. (2004)	1997–1998	Whether corporate governance affects firm performance during a crisis.	South Korea	Change in firm value during a crisis is a function of firm-level differences in corporate governance factors.
Firm	Kang et al. (2010)	1997–1998	How owner-managers’ incentives and firm-specific measures of corporate governance affect restructuring decisions during shocks.	580 Korean firms	The controlling shareholders’ incentives to expropriate other investors are high during an economic shock.
Firm	Alfaro and Chen (2012)	1995–2008	Role of foreign ownership in establishment performance during the global financial crisis.	Multinational firms from five countries	The advantage of foreign ownership is clearly pronounced during the crisis, while relatively muted in non-crisis years.
Firm	Calomiris, Love, and Martínez Pería (2012)	1997–2008	Measure firms’ sensitivity to credit supply shocks through a combination of variables relating to the capital structure and capital structure.	16,000 firms from 44 countries	Return sensitivities to the crisis shocks imply large influences on residual equity returns during a crisis.
Firm		2007–2009	Examine how the global crisis affected firm performance and how various linkages propagated shocks across borders.	7722 non-financial firms in 42 countries	The crisis had a bigger negative impact on firms with greater sensitivity to business cycles and trade developments.
Firm+country	Clarke et al. (2012)	2002–2009	How country and firm characteristics affected firms’ financial constraints and their likelihood of survival during the early phase of the global crisis.	Survey of 360 firms from 23 countries	Financial constraints during the crisis were less severe in countries with well-established foreign banks.
Firm	Liu et al. (2012)	2007–2008	The effect of the Chinese corporate governance structure on the change in firm value during the global crisis.	Chinese firms	Chinese state-owned firms that performed poorly before the global crisis performed better during the crisis.
Firm	Gupta et al. (2013)	2006	Study the impact of internal corporate governance on performance during the crisis.	4040 firms from 23 countries	Well-governed firms do not outperform poorly governed firms.

Data source: scholar.google.com.

Table 2. List of variables.

Variables	Description
Dependent variables – firm performance
ROA	Returns on assets, net income divided by the book value of total assets
ROE	Returns on assets, net income divided by the book value of equity
EPS	Earnings per share in RMB
Independent variables
Firm level
Disclosure quality
SIZE	Size of firm, logarithm of sales
AGE	Firm age, number of years since the earliest data availability in https://www.cninfo.com.cn
CPA	Dummy variable = 1, if firms adopt Big Four accounting firms as their auditor, 0 otherwise
OPION	Unqualified opinion = 1, Unqualified opinion with an emphasis of matter = 2, Qualified opinion = 3, Disclaimer opinion = 4, Adverse opinion = 5
Financial structure
LEV	Leverage ratio, debt over equity
CUR	Current ratio, ratio of current liabilities to current assets
P/E	P/E, price-to-earnings
P/B	P/B, price-to-book
CF	Cash flow per share = (Operating cash flow - Preferred dividends) / Common shares outstanding
DIV	Dividend yield = Annual dividends per share / Price per share
Ownership structure
STATE	State share ratio, shares with the stock rights belonging to the country
DOMI	Domestic institutions’ share ratio, shares with stock rights belonging to domestic legal persons
FORI	Foreign institutions’ share ratio, shares with stock rights belonging to foreign legal persons
EMPL	Employees’ share ratio, shares with stock rights belonging to the employees
PUB	Public share ratio, shares with stock rights belonging to the public
TOP	Top ten shareholder ratio, the total shares owned by the top ten shareholders
Macroeconomic level
GCONF	Consumer confidence index
PPI	Producer price index, the average change over time in the selling prices received by domestic producers for their output
GEXR	Value of exports (millions of RMB)
GM2R	Annual growth rate of money supply (M2)
Crisis variable
CRISIS	Crisis period from 2007 to 2010, the dummy variable = 1, 0 otherwise

Notes: This table presents the variables used to examine the relationship between firm performance and macroeconomy. All data are employed at the annual frequency.

Data source: https://www.cninfo.com.cn.

Table 3. Descriptive statistics.

Category	N	Industry		N			N
A-stock	1438	Agriculture		31	ADR		13
B-stock	170	Mining		44	CPA		924
H-stock	50	Manufacturing		893	Age
SH-listing	796	Utility		70	6y–10y		348
ZH-listing	656	Construction		32	11y–14y		355
		Transportation		69	15y–18y		492
		Information technology		83	19y–23y		257
		Wholesale and retail		106
		Social service		53
		Media & culture		19
		Comprehensive		52
Dependent variable	ROA	ROE	EPS
Mean	4.41	6.84	0.32
Median	4.43	7.06	0.23
Maximum	31.69	65.90	2.22
Minimum	−42.76	−108.56	−1.37
Std. Dev.	6.76	14.50	0.36
Independent variable	AGE	CPA	SIZE	OPION	LEV	CUR	P/B
Mean	15.44	0.04	14.64	1.03	119.19	157.74	3.95
Median	15.00	0.00	14.55	1.00	91.96	123.24	2.58
Maximum	34.00	1.00	20.60	4.00	164.05	574.25	449.04
Minimum	6.00	0.00	10.72	1.00	0.17	0.00	0.36
Std. Dev.	6.25	0.19	1.12	0.21	114.22	170.49	8.85
	P/E	CF	DIV	STATE	DOMI	FORI	EMPL
Mean	87.04	0.46	1.17	24.64	11.21	1.25	0.27
Median	34.94	0.35	0.56	18.11	0.00	0.00	0.00
Maximum	434.47	11.63	17.90	86.20	80.28	75.71	36.80
Minimum	1.10	−8.18	0.00	0.00	0.00	0.00	0.00
Std. Dev.	319.53	0.77	1.71	25.39	18.61	6.11	1.91
	PUB	TOP	GCONF	GEXR	GM2	PPI
Mean	53.18	22.45	102.28	106,555.60	18.05	1.88
Median	47.57	11.31	100.50	111,055.00	17.57	3.00
Maximum	100.00	96.34	113.10	174,623.00	27.68	7.10
Minimum	0.00	0.09	93.20	48,058.00	13.60	−4.00
Std. Dev.	24.67	23.20	7.20	37,463.61	3.65	3.09

Notes: This table reports descriptive statistics on the main analyses for the large sample of 1,452 firms and the macroeconomic variables. Table 2 summarises the definitions of variables. These variables are measured in percentages, except for EPS, cash flow per share (CF), and exports (GEXR) in RMB.

Data source: https://www.cninfo.com.cn.

Table 4. Pearson correlation coefficients.

	ROA	ROE	EPS	CF	CUR	LEV	PE	PB	DIV	AGE	CPA	OPION	SIZE	STATE	DOMI	FORI	EMPL	PUB	TOP	GCONF	GEXR	GM2R	PPI
ROA	1.00
ROE	0.58***	1.00
EPS	0.61***	0.37***	1.00
CF	0.16***	0.09***	0.36***	1.00
CUR	0.08***	0.01	0.03**	−0.05***	1.00
LEV	−0.18***	0.00	−0.09***	0.06***	−0.18***	1.00
PE	−0.11***	−0.06***	−0.14***	−0.07***	0.01	−0.01	1.00
PB	0.19***	0.20***	0.08***	−0.02	0.02	0.16***	0.07***	1.00
DIV	0.08***	0.03**	0.13***	0.11***	0.02*	−0.07***	−0.11***	−0.11***	1.00
AGE	−0.08***	−0.02	−0.11***	0.01	−0.05***	0.13***	0.06***	−0.01	−0.04***	1.00
CPA	0.04***	0.02	0.09***	0.06***	−0.01	−0.03**	−0.03**	−0.02	0.12***	0.03**	1.00
OPION	−0.13***	−0.07***	−0.14***	−0.07***	0.00	0.08***	0.03*	0.08***	−0.05***	0.05***	0.00	1.00
SIZE	0.04***	0.04***	0.33***	0.28***	−0.14***	0.24***	−0.12***	−0.16***	0.24***	0.15***	0.26***	−0.08***	1.00
STATE	−0.05***	−0.03**	−0.07***	0.06***	−0.04***	−0.03*	−0.01	−0.10***	0.17***	0.07***	0.07***	0.01	0.17***	1.00
DOMI	0.04**	0.05***	0.03**	−0.05***	−0.02	0.01	0.00	0.05***	−0.04***	−0.09***	−0.01	0.01	−0.17***	−0.42***	1.00
FORI	0.02	0.01	0.02	0.01	0.00	−0.05***	−0.02*	−0.01	0.06***	−0.08***	0.03**	0.01	−0.03**	−0.11***	0.04**	1.00
EMPL	0.00	0.00	0.01	0.00	0.00	0.00	−0.01	0.00	0.00	−0.05***	−0.01	−0.01	−0.01	0.00	0.00	−0.01	1.00
PUB	−0.01	0.00	0.04**	0.01	0.02	0.06**	0.02	0.05***	−0.12***	0.10***	−0.09***	−0.01	0.05***	−0.30***	−0.13***	−0.05***	−0.02	1.00
TOP	0.10***	0.05***	0.21***	0.11***	0.01	0.04**	−0.01	0.03**	−0.03**	−0.06***	0.03*	−0.05***	0.23***	−0.34***	−0.22***	−0.07***	−0.03**	0.33***	1.00
GCONF	0.08***	0.08***	0.13***	0.03**	−0.01	0.00	0.04**	0.13***	−0.16***	−0.07***	−0.01	−0.03*	0.01	−0.11***	0.04**	0.05***	0.00	0.14***	0.16***	1.00
GEXR	0.10***	0.07***	0.17***	0.02	0.05***	0.04***	0.03 **	0.12***	−0.18***	−0.04**	−0.07***	−0.01	0.11***	−0.44***	−0.14***	−0.03*	−0.04**	0.45***	0.58***	0.41***	1.00
GM2R	0.03**	0.02	0.05***	0.08***	−0.01	0.01	0.04***	0.06***	−0.10***	0.02	−0.01	−0.02	0.05***	−0.12***	−0.06***	−0.02	−0.01	0.12***	0.17***	0.06***	0.07***	1.00
PPI	0.01	0.01	0.00	0.01	0.01	−0.01	−0.01	−0.02	0.00	0.00	0.01	−0.03**	0.00	−0.01	0.02	−0.02	−0.01	−0.01	−0.01	0.01	0.00	−0.01	1.00

Notes: ***, **, and * indicate the 1, 5, and 10% significant levels, respectively. For the notation of the variables, see Table 2.

Data source: https://www.cninfo.com.cn.

Table 5. Regression results of ROA as dependent variable.

Dependent variable: ROA	All years: 1999–2010				Before the financial crisis: 1999–2006				During the financial crisis: 2007–2010
	Firm		Firm and Macro		Firm		Firm and Macro		Firm		Firm and Macro
ROA(-1)	0.267***	(0.000)	0.302***	(0.000)	0.346***	(0.000)	0.316***	(0.000)	0.039	(0.811)	−0.290**	(0.036)
CF	0.876***	(0.000)	0.704***	(0.000)	1.120***	(0.002)	1.057**	(0.035)	0.132	(0.648)	0.359	(0.171)
CUR	−0.002**	(0.019)	−0.004***	(0.000)	−0.001	(0.632)	−0.001	(0.630)	0.001	(0.798)	0.005	(0.250)
LEV	−0.001	(0.506)	0.003***	(0.000)	0.003***	(0.000)	0.003***	(0.000)	0.012	(0.180)	0.008	(0.374)
PE	−0.063***	(0.000)	−0.067***	(0.000)	−0.006***	(0.005)	−0.002	(0.269)	0.002	(0.205)	−0.006*	(0.081)
PB	−0.001***	(0.000)	−0.001***	(0.000)	0.170	(0.169)	0.192	(0.283)	0.010	(0.653)	−0.001	(0.967)
DIV	0.152***	(0.000)	0.153***	(0.000)	−0.122**	(0.012)	−0.130**	(0.010)	−0.235	(0.387)	−0.110	(0.612)
AGE	−0.161***	(0.000)	−0.130***	(0.000)	−1.848***	(0.009)	−1.674**	(0.031)	2.632	(0.109)	2.898*	(0.085)
CPA	0.200	(0.254)	−0.306	(0.100)	−2.897***	(0.000)	−6.737**	(0.017)	−13.418	(0.525)	−5.136	(0.841)
OPION	−1.629***	(0.003)	−1.891	(0.118)	−2.817***	(0.001)	−2.447***	(0.001)	6.050	(0.179)	3.356	(0.221)
SIZE	−3.186***	(0.000)	−2.603***	(0.000)	−1.248*	(0.094)	−3.817***	(0.000)	−5.445**	(0.047)	−5.606**	(0.016)
STATE	−1.082***	(0.000)	−1.195***	(0.000)	−0.037*	(0.089)	−0.058*	(0.086)	−0.013	(0.791)	0.022	(0.824)
DOMI	−0.005	(0.541)	−0.005	(0.583)	−0.033**	(0.038)	−0.055*	(0.066)	−0.072	(0.307)	0.121	(0.220)
FORI	0.028***	(0.002)	0.014	(0.147)	0.393*	(0.071)	0.289	(0.137)	0.304	(0.549)	−0.118	(0.770)
EMPL	0.033	(0.337)	−0.008	(0.805)	0.233	(0.700)	−0.003	(0.996)	32.767	(0.432)	102.969	(0.266)
PUB	0.178	(0.487)	0.124	(0.514)	0.066***	(0.005)	0.045	(0.196)	−0.009	(0.812)	−0.082	(0.206)
TOP	−0.001	(0.879)	0.004	(0.316)	−0.024*	(0.084)	−0.010	(0.628)	0.078	(0.209)	0.048*	(0.088)
GCONF			0.011*	(0.072)			−0.007	(0.755)			34.859	(0.336)
GEXR			0.017***	(0.001)			0.000	(0.557)			0.000	(0.323)
GM2R			0.000	(0.461)			−0.320***	(0.000)			−10.986	(0.341)
PPI			0.000	(0.973)			−0.274***	(0.000)			0.258	(0.139)
CRISIS	−0.025***	(0.000)	−0.061***	(0.000)
No. of observations		17,244		17,244		11,489		11,489		5731		5731
Sargan test[p-value]		0.100		0.333		0.770		0.524		0.972		0.932

Notes: The table reports results from GMM estimations of the effects of firm-level and macroeconomic-level variables on firm profitability. The dependent variable is the return on assets (ROA). The estimation method is the two-step GMM dynamic panel estimator. For the notation of the variables, see Table 2. The full sample includes 18,876 observations from 1452 firms. The full period covers the years 1999 to 2010, before the financial crisis 1999 to 2006, and after the financial crisis 2007 to 2010. P-values are in parentheses. Coefficients that are significantly different from zero at the 1, 5, and 10% levels are marked with ***, **, and *, respectively. The null hypothesis of the Sargan test is that the instruments used are not correlated with residuals (over-identifying restrictions).

Data source: https://www.cninfo.com.cn.

Table 6. Regression results of ROE as dependent variable.

Dependent variable: ROE	All years: 1999–2010				Before the financial crisis: 1999–2006				During the financial crisis: 2007–2010
	Firm		Firm and Macro		Firm		Firm and Macro		Firm		Firm and Macro
ROE (-1)	0.019**	(0.045)	0.040***	(0.000)	0.244***	(0.000)	0.227***	(0.000)	0.049	(0.517)	0.052	(0.428)
CF	2.180***	(0.000)	1.990***	(0.000)	2.039***	(0.006)	1.170	(0.364)	−4.570	(0.394)	0.100	(0.974)
CUR	0.000	(0.856)	−0.002	(0.128)	−0.002	(0.459)	−0.002	(0.729)	−0.001*	(0.055)	0.000	(0.699)
LEV	−0.036***	(0.000)	−0.035***	(0.000)	−0.025	(0.162)	−0.017	(0.407)	−0.057	(0.331)	−0.074	(0.150)
PE	−0.003***	(0.000)	−0.002***	(0.000)	−0.004	(0.301)	0.002	(0.719)	−0.001	(0.353)	−0.002*	(0.062)
PB	0.723***	(0.000)	0.654***	(0.000)	0.080	(0.801)	0.777**	(0.041)	0.455**	(0.031)	0.382**	(0.015)
DIV	−0.074	(0.240)	−0.116*	(0.080)	−0.190*	(0.080)	−0.257*	(0.051)	−0.349	(0.461)	−0.570	(0.199)
AGE	0.986**	(0.012)	−0.055	(0.909)	−6.207***	(0.009)	−2.546	(0.290)	−0.406	(0.925)	0.088	(0.982)
CPA	−7.590***	(0.000)	−11.600***	(0.000)	−11.649***	(0.001)	−18.072**	(0.046)	67.030	(0.136)	61.998	(0.139)
OPION	−7.731***	(0.000)	−8.094***	(0.000)	−4.924***	(0.005)	−2.952*	(0.055)	−8.456	(0.193)	1.649	(0.607)
SIZE	−2.126***	(0.000)	−3.912***	(0.000)	2.152	(0.353)	−2.432	(0.358)	7.535	(0.152)	1.974	(0.543)
STATE	0.008	(0.637)	−0.006	(0.783)	−0.117*	(0.093)	−0.169	(0.110)	−0.002	(0.992)	0.143	(0.502)
DOMI	0.078***	(0.000)	0.020	(0.329)	−0.063	(0.325)	−0.119	(0.130)	−0.395	(0.181)	0.004	(0.990)
FORI	0.038	(0.385)	0.049	(0.277)	0.550	(0.282)	0.434	(0.361)	0.153	(0.814)	0.070	(0.907)
EMPL	−1.110	(0.144)	−0.639**	(0.030)	−0.711	(0.599)	−0.952	(0.508)	3.573	(0.524)	5.362	(0.330)
PUB	0.018*	(0.074)	0.022**	(0.019)	0.103	(0.182)	0.112	(0.317)	−0.109	(0.487)	−0.136	(0.333)
TOP	0.017*	(0.067)	0.018	(0.201)	−0.082*	(0.076)	−0.014	(0.804)	−0.059	(0.753)	0.113	(0.558)
GCONF			0.014	(0.356)			−0.091	(0.181)			−0.005	(0.985)
GEXR			0.000	(0.142)			0.000	(0.164)			0.000	(0.270)
GM2R			−0.084***	(0.001)			−0.311	(0.242)			−0.193	(0.268)
PPI			0.092**	(0.041)			−0.214	(0.436)			0.273	(0.290)
CRISIS	−0.683***	(0.001)	−0.063	(0.824)
No of observations		17,148		17,148		11,430		11,430		5716		5716
Sargan test[p-value]		0.193		0.276		0.735		0.587		0.497		0.798

Notes: The table reports results from GMM estimations of the effects of firm-level and macroeconomic-level variables on firm profitability. The dependent variable is the ROE. The estimation method is the two-step GMM dynamic panel estimator. For the notation of the variables, see Table 2. The full sample includes 18,876 observations from 1452 firms. The full period covers the years 1999 to 2010, before the financial crisis 1999 to 2006, and after the financial crisis 2007 to 2010. P-values are in parentheses. Coefficients that are significantly different from zero at the 1%, 5%, and 10% levels are marked with ***, **, and *, respectively. The null hypothesis of the Sargan test is that the instruments used are not correlated with residuals (over-identifying restrictions).

Data source: https://www.cninfo.com.cn.

Table 7. Regression results of EPS as dependent variable.

Dependent variable: EPS	All years: 1999–2010				Before the financial crisis: 1999–2006				During the financial crisis: 2007–2010
	Firm		Firm and Macro		Firm		Firm and Macro		Firm		Firm and Macro
EPS (-1)	0.525***	(0.000)	0.390***	(0.000)	0.577***	(0.000)	0.486***	(0.000)	0.183*	(0.097)	0.070	(0.523)
CF	0.103***	(0.000)	0.081***	(0.000)	0.117***	(0.001)	0.070**	(0.040)	0.037***	(0.009)	0.019	(0.308)
CUR	0.000	(0.192)	0.000	(0.378)	0.000**	(0.047)	0.000	(0.374)	0.000	(0.976)	0.000	(0.817)
LEV	0.000	(0.655)	−0.001***	(0.000)	0.000*	(0.077)	0.000**	(0.014)	−0.001	(0.117)	−0.001	(0.466)
PE	0.000***	(0.000)	0.000***	(0.000)	0.000	(0.926)	0.000	(0.837)	0.000	(0.884)	0.000	(0.220)
PB	0.006***	(0.000)	0.007***	(0.000)	0.038***	(0.000)	0.021**	(0.042)	0.004	(0.128)	0.003	(0.206)
DIV	−0.022***	(0.000)	−0.019***	(0.000)	−0.014***	(0.001)	−0.012***	(0.004)	−0.032**	(0.017)	−0.018	(0.184)
AGE	−0.005	(0.721)	0.045***	(0.000)	0.050	(0.456)	−0.016	(0.699)	−0.005	(0.957)	0.244*	(0.066)
CPA	−0.032	(0.799)	−0.226***	(0.000)	−0.079	(0.531)	−0.153	(0.422)	−0.961	(0.502)	−0.553	(0.615)
OPION	−0.129***	(0.000)	−0.097***	(0.000)	−0.134***	(0.005)	−0.132***	(0.002)	0.169	(0.244)	0.139	(0.180)
SIZE	0.066***	(0.000)	0.158***	(0.000)	−0.038	(0.593)	−0.070	(0.337)	0.186	(0.278)	0.028	(0.875)
STATE	0.003***	(0.002)	0.002***	(0.000)	0.001	(0.734)	0.001	(0.675)	0.002	(0.537)	0.004	(0.322)
DOMI	0.005***	(0.000)	0.003***	(0.000)	−0.003	(0.230)	0.000	(0.891)	−0.004	(0.321)	−0.001	(0.838)
FORI	0.009***	(0.009)	0.002	(0.113)	−0.017	(0.352)	−0.006	(0.681)	0.006	(0.646)	−0.002	(0.914)
EMPL	−0.100***	(0.009)	−0.086*	(0.067)	−0.023	(0.641)	−0.056	(0.161)	1.180	(0.381)	1.201	(0.402)
PUB	0.003***	(0.000)	0.002***	(0.000)	0.000	(0.858)	−0.004	(0.126)	0.000	(0.839)	0.001	(0.465)
TOP	0.000	(0.592)	0.001***	(0.000)	−0.003	(0.142)	−0.002	(0.307)	0.001	(0.710)	0.003*	(0.053)
GCONF			0.002***	(0.000)			0.002	(0.114)			0.022	(0.475)
GEXR			0.000***	(0.000)			0.000	(0.671)			0.000	(0.719)
GM2R			0.006***	(0.000)			−0.011	(0.162)			−0.003	(0.805)
PPI			0.000	(0.703)			−0.009	(0.256)			0.001	(0.880)
CRISIS	−0.100***	(0.000)	−0.095***	(0.000)
No of observations		17,244		17,244		11,519		11,519		5725		5748
Sargan test[p-value]		0.338		0.236		0.507		0.446		0.614		0.169

Notes: The table reports results from GMM estimations of the effects of firm-level and macroeconomic-level variables on firm profitability. The dependent variable is the EPS. The estimation method is the two-step GMM dynamic panel estimator. For the notation of the variables, see Table 2. The full sample includes 18,876 observations from 1452 firms. The full period covers the years 1999 to 2010, before the financial crisis 1999 to 2006, and after the financial crisis 2007 to 2010. P-values are in parentheses. Coefficients that are significantly different from zero at the 1%, 5%, and 10% levels are marked with ***, **, and *, respectively. The null hypothesis of the Sargan test is that the instruments used are not correlated with residuals (over-identifying restrictions).

Data source: https://www.cninfo.com.cn.

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