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  • #1

    Heckman Two-Step — Large Negative Coefficient on Mills Term: Is This Logical?

    Hi all, I’m running a Heckman two-step model to examine the impact of pension freezes on firms’ environmental disclosure. In the second-stage regression, the inverse Mills ratio has a large and statistically significant negative coefficient (–133.39, p = 0.013). My dependent variable (environmental disclosure score) has a mean of about 24.4, a standard deviation of 18.2, and ranges from 0 to around 67. I used two exclusion restrictions (sustainability2_w and SUSTAIBILITY_COMITE_U), which are included only in the second stage, so the model is identified. My question is: does it seem logical to get such a high negative coefficient on the Mills ratio? Could this reasonably suggest that unobserved factors that increase the likelihood of a pension freeze are associated with significantly lower ESG disclosure?



    HTML Code:
     . 
. asdoc probit  hard_final_Exact_new   Firm_Size_w   ROA_w     Leverage_w   Market_book_
> four_w   Non_pension_CFO_w   STD_CFO_w  board_size_w  GenderRatiogenderratio_w  indepe
> ndent_percentage_w    Fund_Status_w  FUNDING_RATIO_w  Platn_Size_w  i.year    i.ff_12 
>  ,  robust cluster (id)  nest replace  drop(i.year i.ff_12  ) dec(4)  save(qqqq)

Iteration 0:  Log pseudolikelihood = -381.41764  
Iteration 1:  Log pseudolikelihood = -349.64094  
Iteration 2:  Log pseudolikelihood = -346.70631  
Iteration 3:  Log pseudolikelihood = -346.66482  
Iteration 4:  Log pseudolikelihood = -346.66469  
Iteration 5:  Log pseudolikelihood = -346.66469  

Probit regression                                       Number of obs =  3,854
                                                        Wald chi2(41) =  95.97
                                                        Prob > chi2   = 0.0000
Log pseudolikelihood = -346.66469                       Pseudo R2     = 0.0911

                                            (Std. err. adjusted for 282 clusters in id)
---------------------------------------------------------------------------------------
                      |               Robust
 hard_final_Exact_new | Coefficient  std. err.      z    P>|z|     [95% conf. interval]
----------------------+----------------------------------------------------------------
          Firm_Size_w |  -.1486931   .0793764    -1.87   0.061     -.304268    .0068818
                ROA_w |   1.394501   1.266187     1.10   0.271     -1.08718    3.876183
           Leverage_w |  -.9995838   .4151587    -2.41   0.016     -1.81328   -.1858876
   Market_book_four_w |   .0046217   .0086523     0.53   0.593    -.0123365      .02158
    Non_pension_CFO_w |  -3.994935   1.690991    -2.36   0.018    -7.309216   -.6806539
            STD_CFO_w |    3.08323   2.895561     1.06   0.287    -2.591966    8.758425
         board_size_w |  -.0078393   .0275714    -0.28   0.776    -.0618782    .0461997
GenderRatiogenderra~w |   -.311062   .6720613    -0.46   0.643    -1.628278    1.006154
independent_percent~w |   .4727935   .6556422     0.72   0.471    -.8122416    1.757829
        Fund_Status_w |   -3.97355   2.085994    -1.90   0.057    -8.062024    .1149231
      FUNDING_RATIO_w |  -.2610834   .4042837    -0.65   0.518    -1.053465    .5312982
         Platn_Size_w |   .0608101   .0651693     0.93   0.351    -.0669194    .1885397
                      |
                 year |
                2005  |  -.2919346     .42794    -0.68   0.495    -1.130682    .5468125
                2006  |  -.0162893   .3777238    -0.04   0.966    -.7566145    .7240358
                2007  |  -.2363701   .4284376    -0.55   0.581    -1.076092    .6033522
                2008  |    .454851   .3243855     1.40   0.161     -.180933    1.090635
                2009  |   .6437069   .3145637     2.05   0.041     .0271733     1.26024
                2010  |   .4648595   .3274794     1.42   0.156    -.1769883    1.106707
                2011  |    .209522   .3635784     0.58   0.564    -.5030786    .9221227
                2012  |   .3991531   .3388834     1.18   0.239    -.2650462    1.063352
                2013  |   .4619265   .3408755     1.36   0.175    -.2061772     1.13003
                2014  |   .5627522   .3245501     1.73   0.083    -.0733542    1.198859
                2015  |   .5361479   .3424661     1.57   0.117    -.1350734    1.207369
                2016  |   .3776218   .3464051     1.09   0.276    -.3013198    1.056563
                2017  |   .4563485   .3514999     1.30   0.194    -.2325787    1.145276
                2018  |   .7855175   .3368549     2.33   0.020     .1252941    1.445741
                2019  |   .5433685   .3639084     1.49   0.135     -.169879    1.256616
                2020  |   .8101857   .3527143     2.30   0.022     .1188783    1.501493
                2021  |    .409564   .4195871     0.98   0.329    -.4128115     1.23194
                2022  |   .1266738   .4616397     0.27   0.784    -.7781234    1.031471
                      |
                ff_12 |
                   2  |   .0650237   .2984135     0.22   0.828     -.519856    .6499033
                   3  |  -.2066733   .2128754    -0.97   0.332    -.6239014    .2105547
                   4  |  -.3422767   .3916597    -0.87   0.382    -1.109916    .4253622
                   5  |  -.2263999   .2333209    -0.97   0.332    -.6837004    .2309006
                   6  |  -.0542146     .23368    -0.23   0.817    -.5122188    .4037897
                   7  |   .1257675   .4124482     0.30   0.760    -.6826161     .934151
                   8  |  -.3136073   .2436409    -1.29   0.198    -.7911347    .1639201
                   9  |   .4064531   .2035085     2.00   0.046     .0075838    .8053223
                  10  |  -.1490405   .2554473    -0.58   0.560     -.649708     .351627
                  11  |   .2807591     .22041     1.27   0.203    -.1512366    .7127549
                  12  |  -.0448456   .2166022    -0.21   0.836    -.4693781     .379687
                      |
                _cons |  -.9685873   .9632249    -1.01   0.315    -2.856473    .9192987
---------------------------------------------------------------------------------------
Click to Open File:  qqqq.doc

. 
. predict lefthat, xb // Get the linear prediction
(4122 missing values generated)

. gen mills = normalden(lefthat) / normal(lefthat) // Generate the inverse Mill's ratio
(4,122 missing values generated)

. 
. 
. 
. 
. 
. 
. asdoc reg ENVIRON_DISCLOSURE_SCORE_w hard_final_Exact_new   csopresence1  FREEZEXcso F
> irm_Size_w   ROA_w     Leverage_w   Market_book_four_w   Non_pension_CFO_w   STD_CFO_w
>   board_size_w  GenderRatiogenderratio_w  independent_percentage_w sustainability2_w S
> USTAIBILITY_COMITEE_FU    Fund_Status_w  FUNDING_RATIO_w  Platn_Size_w mills  i.year  
>   i.ff_12 ,   robust cluster (id) nest replace  drop(i.year i.ff_12  ) dec(4)  save(qq
> qkkq)

Linear regression                               Number of obs     =      3,053
                                                F(46, 251)        =      60.40
                                                Prob > F          =     0.0000
                                                R-squared         =     0.6882
                                                Root MSE          =     12.677

                                            (Std. err. adjusted for 252 clusters in id)
---------------------------------------------------------------------------------------
                      |               Robust
ENVIRON_DISCLOSURE_~w | Coefficient  std. err.      t    P>|t|     [95% conf. interval]
----------------------+----------------------------------------------------------------
 hard_final_Exact_new |   8.920114   3.485295     2.56   0.011     2.055963    15.78426
         csopresence1 |   6.482304   1.253054     5.17   0.000     4.014465    8.950143
           FREEZEXcso |   10.30082    5.88566     1.75   0.081     -1.29075    21.89239
          Firm_Size_w |     16.805   7.064002     2.38   0.018     2.892727    30.71727
                ROA_w |  -188.2846   66.45055    -2.83   0.005    -319.1563    -57.4129
           Leverage_w |   122.6556   48.26031     2.54   0.012     27.60882    217.7024
   Market_book_four_w |  -.6168643    .228682    -2.70   0.007    -1.067244   -.1664841
    Non_pension_CFO_w |   522.4601   189.6096     2.76   0.006     149.0316    895.8886
            STD_CFO_w |  -349.5499    148.372    -2.36   0.019    -641.7627   -57.33712
         board_size_w |   1.290604    .436255     2.96   0.003     .4314169    2.149791
GenderRatiogenderra~w |   35.71305   16.04088     2.23   0.027     4.121182    67.30493
independent_percent~w |  -54.92927   23.29206    -2.36   0.019    -100.8021   -9.056474
    sustainability2_w |   .5414999   .0373389    14.50   0.000     .4679623    .6150374
SUSTAIBILITY_COMITE~U |   2.366581   1.184138     2.00   0.047     .0344671    4.698694
        Fund_Status_w |   477.1368   186.8281     2.55   0.011     109.1864    845.0873
      FUNDING_RATIO_w |   28.16416   13.19009     2.14   0.034     2.186802    54.14151
         Platn_Size_w |  -6.319805   2.957543    -2.14   0.034    -12.14457   -.4950405
                mills |  -133.3892   53.35121    -2.50   0.013    -238.4623   -28.31607
                      |
                 year |
                2006  |  -31.80994   13.72755    -2.32   0.021     -58.8458   -4.774077
                2007  |  -4.085754    3.58242    -1.14   0.255    -11.14119     2.96968
                2008  |  -88.11516   36.49273    -2.41   0.016    -159.9861   -16.24418
                2009  |  -110.2062   45.46549    -2.42   0.016    -199.7487   -20.66372
                2010  |  -87.97598   36.99328    -2.38   0.018    -160.8328   -15.11919
                2011  |   -56.3718   24.86244    -2.27   0.024    -105.3374    -7.40622
                2012  |  -76.97707   33.90849    -2.27   0.024    -143.7585   -10.19564
                2013  |  -83.63576   36.86525    -2.27   0.024    -156.2404   -11.03111
                2014  |  -93.10664   41.60758    -2.24   0.026    -175.0511   -11.16216
                2015  |  -86.56858   40.33304    -2.15   0.033    -166.0029   -7.134258
                2016  |  -66.77477   32.86188    -2.03   0.043    -131.4949   -2.054605
                2017  |  -73.28445    36.5932    -2.00   0.046    -145.3533     -1.2156
                2018  |  -112.4621   52.15727    -2.16   0.032    -215.1837   -9.740401
                2019  |  -82.22986   40.63829    -2.02   0.044    -162.2654   -2.194366
                2020  |  -113.6532   53.25484    -2.13   0.034    -218.5365   -8.769923
                2021  |  -64.27849   34.37595    -1.87   0.063    -131.9806    3.423572
                2022  |  -29.20575   20.68805    -1.41   0.159    -69.95003    11.53854
                      |
                ff_12 |
                   2  |  -14.28764   4.955029    -2.88   0.004    -24.04637   -4.528907
                   3  |   23.79015   10.37081     2.29   0.023     3.365261    44.21504
                   4  |   42.69021   17.53024     2.44   0.016     8.165093    77.21532
                   5  |   34.90489   11.15738     3.13   0.002     12.93088     56.8789
                   6  |   6.434335   3.873674     1.66   0.098    -1.194711    14.06338
                   7  |   -20.0249   7.356159    -2.72   0.007    -34.51256   -5.537236
                   8  |   45.84821   15.51659     2.95   0.003     15.28891    76.40751
                   9  |  -61.87624   20.05014    -3.09   0.002    -101.3642    -22.3883
                  10  |   21.75348   7.807923     2.79   0.006     6.376088    37.13087
                  11  |  -41.42383   13.41106    -3.09   0.002    -67.83638   -15.01128
                  12  |   6.663091   3.655356     1.82   0.070    -.5359882    13.86217
                      |
                _cons |   211.2848   92.80652     2.28   0.024       28.506    394.0635
---------------------------------------------------------------------------------------
Click to Open File:  qqqkkq.doc

.
    Tags: None
  • #2
    Show us the output from -heckman, twostep-.

    Comment

    • #3
      Thanks professor Stephen



      Main Variables
      • hard_final_Exact_new:
        An indicator variable equal to 1 if a firm freezes its defined benefit (DB) pension plan for all employees, and 0 otherwise. Firm-year observations after the freeze year for freeze firms are excluded from all analyses. Therefore, some firms will have 0 for all periods, while others will have 0 until the year they initiate a hard freeze (coded as 1 in that year).
      • csopresence1:
        A binary variable equal to 1 if the firm has a Chief Sustainability Officer (CSO) in a given year, and 0 otherwise.
      • FREEZEXcso:
        An interaction term equal to the product of hard_final_Exact_new and csopresence1:
      i.year i.ff_12 is control for industry fixed effect and year fixed effect

      HTML Code:
      .
. heckman ENVIRON_DISCLOSURE_SCORE_w   csopresence1  FREEZEXcso Firm_Size_w   ROA_w    
> Leverage_w   Market_book_four_w   Non_pension_CFO_w   STD_CFO_w  board_size_w  GenderR
> atiogenderratio_w  independent_percentage_w sustainability2_w SUSTAIBILITY_COMITEE_FU
>    Fund_Status_w  FUNDING_RATIO_w  Platn_Size_w   i.year    i.ff_12, select(hard_final
> _Exact_new = Firm_Size_w ROA_w Leverage_w Market_book_four_w Non_pension_CFO_w STD_CFO
> _w board_size_w GenderRatiogenderratio_w independent_percentage_w Fund_Status_w FUNDIN
> G_RATIO_w Platn_Size_w i.year i.ff_12) twostep first
note: FREEZEXcso omitted because of collinearity.

Iteration 0:  Log likelihood = -317.28198  
Iteration 1:  Log likelihood = -285.26183  
Iteration 2:  Log likelihood = -280.38603  
Iteration 3:  Log likelihood = -279.39297  
Iteration 4:  Log likelihood = -279.10032  
Iteration 5:  Log likelihood = -279.00598  
Iteration 6:  Log likelihood = -278.97491  
Iteration 7:  Log likelihood = -278.96451  
Iteration 8:  Log likelihood =   -278.961  
Iteration 9:  Log likelihood = -278.95979  
Iteration 10: Log likelihood = -278.95938  
Iteration 11: Log likelihood = -278.95924  
Iteration 12: Log likelihood = -278.95919  
Iteration 13: Log likelihood = -278.95917  
Iteration 14: Log likelihood = -278.95917  
Iteration 15: Log likelihood = -278.95916  
Iteration 16: Log likelihood = -278.95916  
Iteration 17: Log likelihood = -278.95916  
Iteration 18: Log likelihood = -278.95916  
Iteration 19: Log likelihood = -278.95916  (not concave)
Iteration 20: Log likelihood = -278.95916  (not concave)
Iteration 21: Log likelihood = -278.95916  (not concave)
Iteration 22: Log likelihood = -278.95916  (not concave)
Iteration 23: Log likelihood = -278.95916  (not concave)
Iteration 24: Log likelihood = -278.95916  (not concave)
Iteration 25: Log likelihood = -278.95916  (not concave)
Iteration 26: Log likelihood = -278.95916  (not concave)
Iteration 27: Log likelihood = -278.95916  (not concave)
Iteration 28: Log likelihood = -278.95916  (not concave)
Iteration 29: Log likelihood = -278.95916  (not concave)
Iteration 30: Log likelihood = -278.95916  (not concave)
Iteration 31: Log likelihood = -278.95916  (not concave)
Iteration 32: Log likelihood = -278.95916  (not concave)
Iteration 33: Log likelihood = -278.95916  (not concave)
Iteration 34: Log likelihood = -278.95916  (not concave)
Iteration 35: Log likelihood = -278.95916  (not concave)
Iteration 36: Log likelihood = -278.95916  (not concave)
Iteration 37: Log likelihood = -278.95916  (not concave)
Iteration 38: Log likelihood = -278.95916  (not concave)
Iteration 39: Log likelihood = -278.95916  (not concave)
Iteration 40: Log likelihood = -278.95916  (not concave)
Iteration 41: Log likelihood = -278.95916  (not concave)
Iteration 42: Log likelihood = -278.95916  (not concave)
Iteration 43: Log likelihood = -278.95916  (not concave)
Iteration 44: Log likelihood = -278.95916  (not concave)
Iteration 45: Log likelihood = -278.95916  (not concave)
Iteration 46: Log likelihood = -278.95916  (not concave)
Iteration 47: Log likelihood = -278.95916  (not concave)
Iteration 48: Log likelihood = -278.95916  (not concave)
Iteration 49: Log likelihood = -278.95916  (not concave)
Iteration 50: Log likelihood = -278.95916  (not concave)
Iteration 51: Log likelihood = -278.95916  (not concave)
Iteration 52: Log likelihood = -278.95916  (not concave)
Iteration 53: Log likelihood = -278.95916  (not concave)
Iteration 54: Log likelihood = -278.95916  (not concave)
Iteration 55: Log likelihood = -278.95916  (not concave)
Iteration 56: Log likelihood = -278.95916  (not concave)
Iteration 57: Log likelihood = -278.95916  (not concave)
Iteration 58: Log likelihood = -278.95916  (not concave)
Iteration 59: Log likelihood = -278.95916  (not concave)
Iteration 60: Log likelihood = -278.95916  (not concave)
Iteration 61: Log likelihood = -278.95916  (not concave)
Iteration 62: Log likelihood = -278.95916  (not concave)
Iteration 63: Log likelihood = -278.95916  (not concave)
Iteration 64: Log likelihood = -278.95916  (not concave)
Iteration 65: Log likelihood = -278.95916  (not concave)
Iteration 66: Log likelihood = -278.95916  (not concave)
Iteration 67: Log likelihood = -278.95916  (not concave)
Iteration 68: Log likelihood = -278.95916  (not concave)
Iteration 69: Log likelihood = -278.95916  (not concave)
Iteration 70: Log likelihood = -278.95916  (not concave)
Iteration 71: Log likelihood = -278.95916  (not concave)
Iteration 72: Log likelihood = -278.95916  (not concave)
Iteration 73: Log likelihood = -278.95916  (not concave)
Iteration 74: Log likelihood = -278.95916  (not concave)
Iteration 75: Log likelihood = -278.95916  (not concave)
Iteration 76: Log likelihood = -278.95916  (not concave)
Iteration 77: Log likelihood = -278.95916  (not concave)
Iteration 78: Log likelihood = -278.95916  (not concave)
Iteration 79: Log likelihood = -278.95916  (not concave)
Iteration 80: Log likelihood = -278.95916  (not concave)
Iteration 81: Log likelihood = -278.95916  (not concave)
Iteration 82: Log likelihood = -278.95916  (not concave)
Iteration 83: Log likelihood = -278.95916  (not concave)
Iteration 84: Log likelihood = -278.95916  (not concave)
Iteration 85: Log likelihood = -278.95916  (not concave)
Iteration 86: Log likelihood = -278.95916  (not concave)
Iteration 87: Log likelihood = -278.95916  (not concave)
Iteration 88: Log likelihood = -278.95916  (not concave)
Iteration 89: Log likelihood = -278.95916  (not concave)
Iteration 90: Log likelihood = -278.95916  (not concave)
Iteration 91: Log likelihood = -278.95916  (not concave)
Iteration 92: Log likelihood = -278.95916  (not concave)
Iteration 93: Log likelihood = -278.95916  (not concave)
Iteration 94: Log likelihood = -278.95916  (not concave)
Iteration 95: Log likelihood = -278.95916  (not concave)
Iteration 96: Log likelihood = -278.95916  (not concave)
Iteration 97: Log likelihood = -278.95916  (not concave)
Iteration 98: Log likelihood = -278.95916  (not concave)
Iteration 99: Log likelihood = -278.95916  (not concave)
Iteration 100: Log likelihood = -278.95916  (not concave)
Iteration 101: Log likelihood = -278.95916  (not concave)
Iteration 102: Log likelihood = -278.95916  (not concave)
Iteration 103: Log likelihood = -278.95916  (not concave)
Iteration 104: Log likelihood = -278.95916  (not concave)
Iteration 105: Log likelihood = -278.95916  (not concave)
Iteration 106: Log likelihood = -278.95916  (not concave)
Iteration 107: Log likelihood = -278.95916  (not concave)
Iteration 108: Log likelihood = -278.95916  (not concave)
Iteration 109: Log likelihood = -278.95916  (not concave)
Iteration 110: Log likelihood = -278.95916  (not concave)
Iteration 111: Log likelihood = -278.95916  (not concave)
Iteration 112: Log likelihood = -278.95916  (not concave)
Iteration 113: Log likelihood = -278.95916  (not concave)
Iteration 114: Log likelihood = -278.95916  (not concave)
Iteration 115: Log likelihood = -278.95916  (not concave)
Iteration 116: Log likelihood = -278.95916  (not concave)
Iteration 117: Log likelihood = -278.95916  (not concave)
Iteration 118: Log likelihood = -278.95916  (not concave)
Iteration 119: Log likelihood = -278.95916  (not concave)
Iteration 120: Log likelihood = -278.95916  (not concave)
Iteration 121: Log likelihood = -278.95916  (not concave)
Iteration 122: Log likelihood = -278.95916  (not concave)
Iteration 123: Log likelihood = -278.95916  (not concave)
Iteration 124: Log likelihood = -278.95916  (not concave)
Iteration 125: Log likelihood = -278.95916  (not concave)
Iteration 126: Log likelihood = -278.95916  (not concave)
Iteration 127: Log likelihood = -278.95916  (not concave)
Iteration 128: Log likelihood = -278.95916  (not concave)
Iteration 129: Log likelihood = -278.95916  (not concave)
Iteration 130: Log likelihood = -278.95916  (not concave)
Iteration 131: Log likelihood = -278.95916  (not concave)
Iteration 132: Log likelihood = -278.95916  (not concave)
Iteration 133: Log likelihood = -278.95916  (not concave)
Iteration 134: Log likelihood = -278.95916  (not concave)
Iteration 135: Log likelihood = -278.95916  (not concave)
Iteration 136: Log likelihood = -278.95916  (not concave)
Iteration 137: Log likelihood = -278.95916  (not concave)
Iteration 138: Log likelihood = -278.95916  (not concave)
Iteration 139: Log likelihood = -278.95916  (not concave)
Iteration 140: Log likelihood = -278.95916  (not concave)
Iteration 141: Log likelihood = -278.95916  (not concave)
Iteration 142: Log likelihood = -278.95916  (not concave)
Iteration 143: Log likelihood = -278.95916  (not concave)
Iteration 144: Log likelihood = -278.95916  (not concave)
Iteration 145: Log likelihood = -278.95916  (not concave)
Iteration 146: Log likelihood = -278.95916  (not concave)
Iteration 147: Log likelihood = -278.95916  (not concave)
Iteration 148: Log likelihood = -278.95916  (not concave)
Iteration 149: Log likelihood = -278.95916  (not concave)
Iteration 150: Log likelihood = -278.95916  (not concave)
Iteration 151: Log likelihood = -278.95916  (not concave)
Iteration 152: Log likelihood = -278.95916  (not concave)
Iteration 153: Log likelihood = -278.95916  (not concave)
Iteration 154: Log likelihood = -278.95916  (not concave)
Iteration 155: Log likelihood = -278.95916  (not concave)
Iteration 156: Log likelihood = -278.95916  (not concave)
Iteration 157: Log likelihood = -278.95916  (not concave)
Iteration 158: Log likelihood = -278.95916  (not concave)
Iteration 159: Log likelihood = -278.95916  (not concave)
Iteration 160: Log likelihood = -278.95916  (not concave)
Iteration 161: Log likelihood = -278.95916  (not concave)
Iteration 162: Log likelihood = -278.95916  (not concave)
Iteration 163: Log likelihood = -278.95916  (not concave)
Iteration 164: Log likelihood = -278.95916  (not concave)
Iteration 165: Log likelihood = -278.95916  (not concave)
Iteration 166: Log likelihood = -278.95916  (not concave)
Iteration 167: Log likelihood = -278.95916  (not concave)
Iteration 168: Log likelihood = -278.95916  (not concave)
Iteration 169: Log likelihood = -278.95916  (not concave)
Iteration 170: Log likelihood = -278.95916  (not concave)
Iteration 171: Log likelihood = -278.95916  (not concave)
Iteration 172: Log likelihood = -278.95916  (not concave)
Iteration 173: Log likelihood = -278.95916  (not concave)
Iteration 174: Log likelihood = -278.95916  (not concave)
Iteration 175: Log likelihood = -278.95916  (not concave)
Iteration 176: Log likelihood = -278.95916  (not concave)
Iteration 177: Log likelihood = -278.95916  (not concave)
Iteration 178: Log likelihood = -278.95916  (not concave)
Iteration 179: Log likelihood = -278.95916  (not concave)
Iteration 180: Log likelihood = -278.95916  (not concave)
Iteration 181: Log likelihood = -278.95916  (not concave)
Iteration 182: Log likelihood = -278.95916  (not concave)
Iteration 183: Log likelihood = -278.95916  (not concave)
Iteration 184: Log likelihood = -278.95916  (not concave)
Iteration 185: Log likelihood = -278.95916  (not concave)
Iteration 186: Log likelihood = -278.95916  (not concave)
Iteration 187: Log likelihood = -278.95916  (not concave)
Iteration 188: Log likelihood = -278.95916  (not concave)
Iteration 189: Log likelihood = -278.95916  (not concave)
Iteration 190: Log likelihood = -278.95916  (not concave)
Iteration 191: Log likelihood = -278.95916  (not concave)
Iteration 192: Log likelihood = -278.95916  (not concave)
Iteration 193: Log likelihood = -278.95916  (not concave)
Iteration 194: Log likelihood = -278.95916  (not concave)
Iteration 195: Log likelihood = -278.95916  (not concave)
Iteration 196: Log likelihood = -278.95916  (not concave)
Iteration 197: Log likelihood = -278.95916  (not concave)
Iteration 198: Log likelihood = -278.95916  (not concave)
Iteration 199: Log likelihood = -278.95916  (not concave)
Iteration 200: Log likelihood = -278.95916  (not concave)
Iteration 201: Log likelihood = -278.95916  (not concave)
Iteration 202: Log likelihood = -278.95916  (not concave)
Iteration 203: Log likelihood = -278.95916  (not concave)
Iteration 204: Log likelihood = -278.95916  (not concave)
Iteration 205: Log likelihood = -278.95916  (not concave)
Iteration 206: Log likelihood = -278.95916  (not concave)
Iteration 207: Log likelihood = -278.95916  (not concave)
Iteration 208: Log likelihood = -278.95916  (not concave)
Iteration 209: Log likelihood = -278.95916  (not concave)
Iteration 210: Log likelihood = -278.95916  (not concave)
Iteration 211: Log likelihood = -278.95916  (not concave)
Iteration 212: Log likelihood = -278.95916  (not concave)
Iteration 213: Log likelihood = -278.95916  (not concave)
Iteration 214: Log likelihood = -278.95916  (not concave)
Iteration 215: Log likelihood = -278.95916  (not concave)
Iteration 216: Log likelihood = -278.95916  (not concave)
Iteration 217: Log likelihood = -278.95916  (not concave)
Iteration 218: Log likelihood = -278.95916  (not concave)
Iteration 219: Log likelihood = -278.95916  (not concave)
Iteration 220: Log likelihood = -278.95916  (not concave)
Iteration 221: Log likelihood = -278.95916  (not concave)
Iteration 222: Log likelihood = -278.95916  (not concave)
Iteration 223: Log likelihood = -278.95916  (not concave)
Iteration 224: Log likelihood = -278.95916  (not concave)
Iteration 225: Log likelihood = -278.95916  (not concave)
Iteration 226: Log likelihood = -278.95916  (not concave)
Iteration 227: Log likelihood = -278.95916  (not concave)
Iteration 228: Log likelihood = -278.95916  (not concave)
Iteration 229: Log likelihood = -278.95916  (not concave)
Iteration 230: Log likelihood = -278.95916  (not concave)
Iteration 231: Log likelihood = -278.95916  (not concave)
Iteration 232: Log likelihood = -278.95916  (not concave)
Iteration 233: Log likelihood = -278.95916  (not concave)
Iteration 234: Log likelihood = -278.95916  (not concave)
Iteration 235: Log likelihood = -278.95916  (not concave)
Iteration 236: Log likelihood = -278.95916  (not concave)
Iteration 237: Log likelihood = -278.95916  (not concave)
Iteration 238: Log likelihood = -278.95916  (not concave)
Iteration 239: Log likelihood = -278.95916  (not concave)
Iteration 240: Log likelihood = -278.95916  (not concave)
Iteration 241: Log likelihood = -278.95916  (not concave)
Iteration 242: Log likelihood = -278.95916  (not concave)
Iteration 243: Log likelihood = -278.95916  (not concave)
Iteration 244: Log likelihood = -278.95916  (not concave)
Iteration 245: Log likelihood = -278.95916  (not concave)
Iteration 246: Log likelihood = -278.95916  (not concave)
Iteration 247: Log likelihood = -278.95916  (not concave)
Iteration 248: Log likelihood = -278.95916  (not concave)
Iteration 249: Log likelihood = -278.95916  (not concave)
Iteration 250: Log likelihood = -278.95916  (not concave)
Iteration 251: Log likelihood = -278.95916  (not concave)
Iteration 252: Log likelihood = -278.95916  (not concave)
Iteration 253: Log likelihood = -278.95916  (not concave)
Iteration 254: Log likelihood = -278.95916  (not concave)
Iteration 255: Log likelihood = -278.95916  (not concave)
Iteration 256: Log likelihood = -278.95916  (not concave)
Iteration 257: Log likelihood = -278.95916  (not concave)
Iteration 258: Log likelihood = -278.95916  (not concave)
Iteration 259: Log likelihood = -278.95916  (not concave)
Iteration 260: Log likelihood = -278.95916  (not concave)
Iteration 261: Log likelihood = -278.95916  (not concave)
Iteration 262: Log likelihood = -278.95916  (not concave)
Iteration 263: Log likelihood = -278.95916  (not concave)
Iteration 264: Log likelihood = -278.95916  (not concave)
Iteration 265: Log likelihood = -278.95916  (not concave)
Iteration 266: Log likelihood = -278.95916  (not concave)
Iteration 267: Log likelihood = -278.95916  (not concave)
Iteration 268: Log likelihood = -278.95916  (not concave)
Iteration 269: Log likelihood = -278.95916  (not concave)
Iteration 270: Log likelihood = -278.95916  (not concave)
Iteration 271: Log likelihood = -278.95916  (not concave)
Iteration 272: Log likelihood = -278.95916  (not concave)
Iteration 273: Log likelihood = -278.95916  (not concave)
Iteration 274: Log likelihood = -278.95916  (not concave)
Iteration 275: Log likelihood = -278.95916  (not concave)
Iteration 276: Log likelihood = -278.95916  (not concave)
Iteration 277: Log likelihood = -278.95916  (not concave)
Iteration 278: Log likelihood = -278.95916  (not concave)
Iteration 279: Log likelihood = -278.95916  (not concave)
Iteration 280: Log likelihood = -278.95916  (not concave)
Iteration 281: Log likelihood = -278.95916  (not concave)
Iteration 282: Log likelihood = -278.95916  (not concave)
Iteration 283: Log likelihood = -278.95916  (not concave)
Iteration 284: Log likelihood = -278.95916  (not concave)
Iteration 285: Log likelihood = -278.95916  (not concave)
Iteration 286: Log likelihood = -278.95916  (not concave)
Iteration 287: Log likelihood = -278.95916  (not concave)
Iteration 288: Log likelihood = -278.95916  (not concave)
Iteration 289: Log likelihood = -278.95916  (not concave)
Iteration 290: Log likelihood = -278.95916  (not concave)
Iteration 291: Log likelihood = -278.95916  (not concave)
Iteration 292: Log likelihood = -278.95916  (not concave)
Iteration 293: Log likelihood = -278.95916  (not concave)
Iteration 294: Log likelihood = -278.95916  (not concave)
Iteration 295: Log likelihood = -278.95916  (not concave)
Iteration 296: Log likelihood = -278.95916  (not concave)
Iteration 297: Log likelihood = -278.95916  (not concave)
Iteration 298: Log likelihood = -278.95916  (not concave)
Iteration 299: Log likelihood = -278.95916  (not concave)
Iteration 300: Log likelihood = -278.95916  (not concave)
convergence not achieved

Probit regression                                       Number of obs =  3,838
                                                        LR chi2(37)   =  76.65
                                                        Prob > chi2   = 0.0001
Log likelihood = -278.95916                             Pseudo R2     = 0.1208

---------------------------------------------------------------------------------------
 hard_final_Exact_new | Coefficient  Std. err.      z    P>|z|     [95% conf. interval]
----------------------+----------------------------------------------------------------
          Firm_Size_w |  -.1339358   .0879691    -1.52   0.128    -.3063521    .0384805
                ROA_w |   1.727007   1.650965     1.05   0.296    -1.508825     4.96284
           Leverage_w |  -.9042166   .5291363    -1.71   0.087    -1.941305    .1328715
   Market_book_four_w |   .0055228   .0083226     0.66   0.507    -.0107892    .0218348
    Non_pension_CFO_w |  -3.670354   1.934846    -1.90   0.058    -7.462583    .1218747
            STD_CFO_w |   4.828173   3.302772     1.46   0.144     -1.64514    11.30149
         board_size_w |   .0176764   .0305521     0.58   0.563    -.0422046    .0775574
GenderRatiogenderra~w |  -.1414363    .715308    -0.20   0.843    -1.543414    1.260542
independent_percent~w |   .5557866   .7795396     0.71   0.476     -.972083    2.083656
        Fund_Status_w |  -1.609337   2.293591    -0.70   0.483    -6.104692    2.886019
      FUNDING_RATIO_w |  -.6861613   .5028876    -1.36   0.172    -1.671803    .2994802
         Platn_Size_w |   .0966623   .0768351     1.26   0.208    -.0539317    .2472564
                      |
                 year |
                2005  |  -89.48843          .        .       .            .           .
                2006  |  -91.30691          .        .       .            .           .
                2007  |   4.291217   1.263963     3.40   0.001     1.813895    6.768538
                2008  |   4.703695   1.230697     3.82   0.000     2.291574    7.115816
                2009  |   5.108642   1.226216     4.17   0.000     2.705303    7.511981
                2010  |   4.975433    1.22827     4.05   0.000     2.568067    7.382798
                2011  |   4.716931   1.241663     3.80   0.000     2.283316    7.150547
                2012  |   4.942075   1.228291     4.02   0.000     2.534669    7.349482
                2013  |   4.704107   1.239587     3.79   0.000     2.274561    7.133652
                2014  |   4.925444   1.231986     4.00   0.000     2.510795    7.340094
                2015  |   5.039374   1.231629     4.09   0.000     2.625426    7.453321
                2016  |   4.771511   1.238579     3.85   0.000     2.343942    7.199081
                2017  |   4.980121   1.220277     4.08   0.000     2.588422    7.371821
                2018  |   5.306398   1.216891     4.36   0.000     2.921335    7.691461
                2019  |    4.79975   1.229141     3.90   0.000     2.390678    7.208823
                2020  |   5.329877   1.200894     4.44   0.000     2.976168    7.683586
                2021  |   4.907378   1.223503     4.01   0.000     2.509356      7.3054
                2022  |   4.635447   1.250228     3.71   0.000     2.185044    7.085849
                      |
                ff_12 |
                   2  |  -.2420634   .4660918    -0.52   0.604    -1.155587    .6714598
                   3  |  -.0950373   .2453323    -0.39   0.698    -.5758797    .3858052
                   4  |  -.3472825   .4170966    -0.83   0.405    -1.164777    .4702118
                   5  |  -.0982388   .2844617    -0.35   0.730    -.6557734    .4592959
                   6  |  -.0383402   .2589929    -0.15   0.882    -.5459569    .4692765
                   7  |  -4.557521          .        .       .            .           .
                   8  |  -.3255533   .2912213    -1.12   0.264    -.8963366    .2452301
                   9  |   .5148905   .2952353     1.74   0.081      -.06376    1.093541
                  10  |  -.0789648   .2703567    -0.29   0.770    -.6088541    .4509246
                  11  |   .2777062   .2764661     1.00   0.315    -.2641574    .8195698
                  12  |  -.2837174   .2938972    -0.97   0.334    -.8597452    .2923105
                      |
                _cons |  -6.121996          .        .       .            .           .
---------------------------------------------------------------------------------------
Note: 693 failures and 0 successes completely determined.
Warning: Convergence not achieved.
note: two-step estimate of rho = 1.0650681 is being truncated to 1
year: factor variable base category conflict
r(198);

end of do-file

r(198);
      Last edited by hussein bataineh; 19 Apr 2025, 04:58. Reason: h

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