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Table 3 Analyst following (FOLLOW) regressed on capitalized intangible assets divided by underlying intangible assets (NTANG/MVAD) and proxies for other factors found to affect analyst following (1990-1997) EARNSD, LEV) reduced the dispersion and rectified the specification. The inferences are the same with and without the transformations, with the exception of leverage (LEV), which is not significant after being transformed. INTANG/MVAD (or INTANG/TA) equals capitalized intangible assets divided by market value added (or total assets) for firm i for year t; FOLLOW is the average number of analysts following firm i for year t; MVAD equals market value equity (calculated using balance date ordinary shares and stock price) minus book value equity which has intangible assets subtracted for firm i for year t, MVAD/MV equals market value added divided by equity market value for firm 7 for year t; OP/DEBT is operating cash divided by total liabilities for firm i for year t, LG(MV) is natural log of market value equity for firm 7 for year t; AGE is the number of years firm i has been listed; EARNSD is the standard deviation of reported earnings of firm 7 over sample period; LOSS is a dummy variable equal to one for firms with earnings losses for year ¢ and zero otherwise; LEV is total liabilities divided by book value of equity; o’(RET) equals the variance of stock return rolling calculation over preceding and current years for each year the firm appears in the sample within the sample period 1990-1997. Reported are coefficients, f-statistics, one-tail probability where there is a signed prediction and two-tail probability otherwise: *p < 0.05; **p < 0.01). Unreported year and industry dummies are included in the estimation. 2SLS, two stage least squares; OLS. ordinary least squares.
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