APPENDIX FOR STRATEGIC MANAGEMENT JOURNAL ARTICLE
“UNBUNDLING THE EFFECTS OF INSTITUTIONS ON FIRM RESOURCES:
THE CONTINGENT VALUE OF BEING LOCAL IN EMERGING ECONOMY PRIVATE EQUITY”
(MARKUS TAUSSIG AND ANDREW DELIOS, NUS BUSINESS SCHOOL)
Table 1: OLS Regressions on Firm Performance with Fixed Effects for Host country, Investment Year, and PE Firm
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Hypothesis 1b: PE firm local experience
-0.002
0.024
-0.024
0.675**
0.020
0.025
(-0.014) (0.197) (-0.174)
(2.066)
(0.156)
(0.199)
Hypothesis 2a: Host country contract enforcement
-0.035* -0.038*
-0.023
-0.002
-0.034
-0.038**
(-1.671) (-1.823) (-1.054) (-0.098) (-1.582) (-2.018)
Hypothesis 3a: Host country stock market development
0.004
0.004
0.003
0.003
(1.451)
(1.383)
(0.987)
(0.956)
Hypothesis 3a: Host country credit market development
-0.001
0.000
(-0.219)
(-0.103)
British common law origins
0.295
0.164
0.153
0.090
0.282
(0.839)
(0.954)
(0.626)
(0.576)
(0.311)
(0.856)
Host country PE industry size (Logged US fund deals)
0.071
0.092
0.079
0.063
0.089
0.094
(1.074)
(1.539)
(1.182)
(1.008)
(1.306)
(1.499)
Total investment (Logged)
0.057
0.062
0.055
0.059
0.056
0.062
(1.422)
(1.563)
(1.325)
(1.554)
(1.373)
(1.567)
Minority Stake (Dummy)
0.059
0.055
0.045
0.065
0.057
0.057
(0.573)
(0.542)
(0.436)
(0.643)
(0.561)
(0.575)
Hypothesis 2b: Local origins * contract enforcement
-0.040
(-1.578)
Hypothesis 2c: Local experience * contract enforcement
-0.084**
(-2.299)
Hypothesis 3b: Local origins * stock market
0.006
(1.279)
Hypothesis 3b: Local origins * credit market
-0.001
(-0.107)
Hypothesis 3c: Local experience * stock market
Model 7
-0.037
(-0.232)
-0.033
(-1.596)
0.004
(1.391)
0.263
(0.943)
0.069
(1.026)
0.058
(1.457)
0.055
(0.540)
327
0.061
327
0.049
327
0.065
327
0.084
327
0.066
327
0.049
0.000
(-0.182)
0.278
(0.775)
0.093
(1.550)
0.061
(1.533)
0.056
(0.550)
0.001
(0.580)
Hypothesis 3c: Local experience * credit market
Observations
R-squared
Model 8
0.038
(0.273)
-0.038*
(-1.821)
327
0.062
0.000
(-0.172)
327
0.049
*** p<0.01, ** p<0.05, * p<0.1; Z-scores in parentheses. Standard errors computed to correct for two-way clustering of errors by host country and PE firm.
All models include PE firm fixed effects, in addition to the country fixed effects, investment year fixed effects, and variables for share of GSIC industry that were included in all models in the paper’s Table 2.
Table 2: Robustness Tests Using Multiple Interactions and PE Firm Fixed Effects
Model 1
Model 2
Model 3
Hypothesis 1a: PE firm local origins
0.336
-0.121
0.289
(1.186)
(-1.246)
(1.014)
Hypothesis 1b: PE firm local experience
0.685**
-0.008
0.690*
(2.022)
(-0.0499)
(1.840)
Hypothesis 2a: Host country contract enforcement
0.015
-0.034
0.012
(0.742)
(-1.526)
(0.586)
Hypothesis 3a: Host country stock market development
0.002
0.004
0.002
(0.917)
(1.255)
(0.713)
Hypothesis 3a: Host country credit market development
British common law origins
Host country PE industry size (Logged US fund deals)
Total investment (Logged)
Minority Stake (Dummy)
Hypothesis 2b: Local origins * contract enforcement
Hypothesis 2c: Local experience * contract enforcement
-0.201
(-0.757)
0.076
(1.197)
0.056
(1.420)
0.046
(0.454)
-0.051
(-1.630)
-0.0896**
(-2.331)
Hypothesis 3b: Local origins * stock market
-0.340
(-1.167)
0.084
(1.291)
0.053
(1.275)
0.058
(0.577)
0.502*
(1.770)
0.084
(0.477)
Hypothesis 3b: Local origins * credit market
-0.227
(-0.775)
0.079
(1.259)
0.053
(1.344)
0.053
(0.527)
-0.046
(-1.470)
-0.0880**
(-2.222)
0.346
(1.195)
-0.023
(-0.125)
Hypothesis 3c: Local experience * stock market
Model 4
-0.231
(-0.551)
0.019
(0.142)
-0.0339*
(-1.712)
0.003
(0.983)
0.000
(-0.168)
-0.247
(-0.939)
0.094
(1.372)
0.055
(1.346)
0.056
(0.561)
0.000
(0.010)
-0.291
(-1.092)
0.0968*
(1.647)
0.058
(1.459)
0.043
(0.432)
0.006
(1.435)
0.000
(-0.0159)
Hypothesis 3c: Local experience * credit market
Local origins * common law
Local experience * common law
Observations
R-squared
Model 5
-0.158
(-1.607)
0.041
(0.286)
-0.033
(-1.511)
327
0.09
327
0.065
327
0.092
327
0.066
Model 6
0.114
(0.240)
0.760**
(2.093)
0.016
(0.743)
0.001
(0.233)
0.000
(-0.0192)
-0.245
(-0.966)
0.091
(1.399)
0.054
(1.372)
0.048
(0.494)
-0.046
(-1.382)
-0.0944**
(-2.304)
Model 7
0.337
(1.159)
0.651*
(1.720)
0.014
(0.636)
0.002
(0.797)
-0.001
(-0.348)
-0.215
(-0.814)
0.077
(1.223)
0.056
(1.428)
0.044
(0.443)
-0.052
(-1.633)
-0.0885**
(-2.292)
Model 8
0.126
(0.257)
0.700*
(1.843)
0.018
(0.813)
0.000
(0.038)
0.000
(-0.0389)
-0.237
(-1.023)
0.093
(1.441)
0.055
(1.436)
0.041
(0.424)
-0.048
(-1.440)
-0.0932**
(-2.294)
0.000
(0.111)
0.000
(0.095)
327
0.091
0.00781*
(1.834)
0.000
(0.034)
0.001
(0.481)
0.000
(-0.00981)
327
0.099
0.00708*
(1.659)
0.001
(0.080)
0.004
(1.289)
-0.004
(-1.238)
327
0.053
327
0.097
*** p<0.01, ** p<0.05, * p<0.1; Z-scores in parentheses. Standard errors computed to correct for two-way clustering of errors by host country and PE firm.
All models include PE firm fixed effects, in addition to the country fixed effects, investment year fixed effects, and variables for share of GSIC industry that were included in all models in the paper’s Table 2.
Table 3: Interacting Contract Enforcement and Stock Market Development
Sample
Local Origins
Local Experience
Contract Enforcement
Common Law
Market Capitalization
PE Industry Size
Total Investment
Minority Stake
Contract Enforcement *
Market Capitalization
Observations
R-squared
Model 1
Model 2
Model 3
Model 4
Model 5
Full Sample
No Local
Experience
Local
Experience
Foreign
Origins
Local
Origins
-0.059
-0.059
0.082
(-0.968)
(-0.955)
(0.764)
0.059
0.088
0.069
(1.189)
(1.398)
(0.835)
-0.004
-0.012
0.017
-0.012
0.020
(-0.261)
(-0.658)
(0.883)
(-0.969)
(0.632)
0.098
0.073
-0.002
0.053
0.109
(1.584)
(0.870)
(-0.0221)
(0.993)
(1.186)
0.006**
0.002
0.017***
0.003
0.009***
(2.016)
(0.414)
(6.402)
(0.858)
(2.753)
0.038
0.056*
0.041
0.049**
0.025
(1.312)
(1.900)
(0.842)
(2.236)
(0.557)
0.073***
0.051*
0.112***
0.052***
0.072*
(3.555)
(1.725)
(5.119)
(2.804)
(1.843)
0.244**
0.239*
0.458***
0.284**
0.090
(2.328)
(1.887)
(3.197)
(2.550)
(0.298)
-0.001***
0.000
-0.002***
-0.001*
-0.001***
(-2.856)
(-0.824)
(-9.446)
(-1.722)
(-3.038)
327
242
85
235
92
0.128
0.073
0.408
0.093
0.155
*** p<0.01, ** p<0.05, * p<0.1; Z-scores in parentheses. Standard errors computed to correct for two-way clustering of errors by host country and PE firm.
All models include PE firm fixed effects, in addition to the country fixed effects, investment year fixed effects, and variables for share of GSIC industry that were included in all models in the paper’s Table 2.
Table 4: Interacting Contract Enforcement and Credit Market Development
Local Origins
Local Experience
Contract Enforcement
Common Law
Domestic Credit
PE Industry Size
Total Investment
Minority Stake
Contract Enforcement *
Domestic Credit
Observations
R-squared
Model 1
Model 2
Model 3
Model 4
Model 5
Full Sample
No Local
Experience
Local
Experience
Foreign
Origins
Local
Origins
-0.052
-0.067
0.144
(-0.917)
(-1.197)
(1.341)
0.062
0.053
0.119*
(1.113)
(0.804)
(1.743)
-0.002
-0.008
0.005
-0.005
0.029
(-0.0895)
(-0.264)
(0.152)
(-0.211)
(0.620)
0.067
0.044
-0.126
0.015
0.114
(1.178)
(0.543)
(-0.955)
(0.222)
(1.079)
0.003
0.001
0.008**
0.002
0.006
(0.975)
(0.381)
(2.052)
(0.597)
(1.026)
0.036
0.0579*
0.061
0.045*
0.020
(1.212)
(1.928)
(1.307)
(1.927)
(0.435)
0.068***
0.049*
0.114***
0.043**
0.070*
(3.326)
(1.692)
(5.465)
(2.195)
(1.837)
0.224**
0.232*
0.348**
0.241**
0.051
(2.206)
(1.879)
(2.531)
(2.144)
(0.178)
-0.001
0.000
-0.001***
-0.001
-0.001
(-1.503)
(-0.713)
(-2.610)
(-1.281)
(-1.217)
327
242
85
235
92
0.116
0.068
0.348
0.086
0.118
*** p<0.01, ** p<0.05, * p<0.1; Z-scores in parentheses. Standard errors computed to correct for two-way clustering of errors by host country and PE firm.
All models include PE firm fixed effects, in addition to the country fixed effects, investment year fixed effects, and variables for share of GSIC industry that were included in all models in the paper’s Table 2.
Table 5: OLS Regressions on Firm Performance with IFC Share in Investing PE Fund and Host country and Investment Year Fixed Effects
Model 1 Model 2 Model 3 Model 4 Model 5
Model 6
Model 7
Model 8
Hypothesis 1a: PE firm local origins
-0.031
-0.020
0.395*
-0.053
-0.139** -0.280***
-0.039
-0.038
(-0.453)
(-0.286)
(1.958)
(-0.820)
(-2.438)
(-3.243)
(-0.637)
(-0.641)
Hypothesis 1b: PE firm local experience
0.058
0.059
0.024
0.434*
0.081
0.071
0.134
0.203**
(1.028)
(1.118)
(0.383)
(1.943)
(1.348)
(1.294)
(1.579)
(2.319)
Hypothesis 2a: Host country contract enforcement
-0.044** -0.046**
-0.027
-0.028
-0.044** -0.047** -0.047** -0.044**
(-2.175)
(-2.185)
(-1.370)
(-1.306)
(-2.261)
(-2.235)
(-2.268)
(-2.113)
Hypothesis 3a: Host country stock market development
0.005*
0.004*
0.004
0.003
0.005**
(1.786)
(1.726)
(1.447)
(1.226)
(2.001)
Hypothesis 3a: Host country credit market development
0.000
-0.002
0.002
(0.124)
(-0.768)
(0.744)
British common law origins
0.225
0.247
0.256
0.206
0.246
0.263
0.220
0.222
(1.046)
(1.031)
(1.152)
(0.958)
(1.235)
(1.232)
(1.068)
(0.952)
Host country PE industry size (Logged US fund deals)
0.048
0.073
0.059
0.039
0.059
0.074
0.051
0.070
(0.708)
(1.121)
(0.884)
(0.588)
(0.861)
(1.171)
(0.753)
(1.111)
Total investment (Logged)
0.090*** 0.095*** 0.084** 0.095*** 0.090*** 0.093*** 0.091*** 0.092***
(2.793)
(2.978)
(2.570)
(3.034)
(2.752)
(2.869)
(2.788)
(2.888)
Minority Stake (Dummy)
0.173*
0.169*
0.141
0.169*
0.172*
0.135
0.183**
0.176*
(1.861)
(1.766)
(1.462)
(1.916)
(1.798)
(1.280)
(2.013)
(1.865)
0.050
0.061
0.050
0.058
0.031
0.052
0.044
0.056
IFC share of PE Fund (logged)
(0.704)
(0.835)
(0.695)
(0.816)
(0.440)
(0.713)
(0.612)
(0.775)
Hypothesis 2b: Local origins * contract enforcement
-0.054**
(-2.245)
Hypothesis 2c: Local experience * contract enforcement
-0.048
(-1.639)
Hypothesis 3b: Local origins * stock market
0.003***
(3.074)
Hypothesis 3b: Local origins * credit market
0.004***
(2.882)
Hypothesis 3c: Local experience * stock market
-0.002*
(-1.840)
Hypothesis 3c: Local experience * credit market
-0.003***
(-2.622)
Observations
307
307
307
307
307
307
307
307
R-squared
0.130
0.115
0.141
0.139
0.143
0.133
0.135
0.122
*** p<0.01, ** p<0.05, * p<0.1; Z-scores in parentheses. Standard errors computed to correct for two-way clustering of errors by host country and PE firm.
All models include PE firm fixed effects, in addition to the country fixed effects, investment year fixed effects, and variables for share of GSIC industry that were included in all models in the paper’s Table 2.