Table 4 GMM results for board independence and financial performance.

Financial performance (t−1)

0.271^*** (0.000)

0.116^*** (0.000)

0.015^*** (0.000)

0.414^*** (0.000)

Financial performance (t−2)

−0.027^*** (0.000)

−0.174^*** (0.000)

0.014^*** (0.000)

0.0255^*** (0.000)

Board independence

−0.498^*** (0.000)

−8.04^*** (0.000)

−9.630^*** (0.000)

−21.734^*** (0.000)

Board size

−0.132^*** (0.000)

−0.968^*** (0.000)

−9.978^*** (0.000)

−14.377^*** (0.000)

CEO duality

0.038 (0.4253)

−7.050^*** (0.000)

−6.208^*** (0.000)

−30.477^*** (0.000)

Firm size

0.020^*** (0.000)

0.603^*** (0.000)

4.491^*** (0.000)

21.857^*** (0.000)

Liquidity ratio

−0.001 (0.4722)

−0.456 ^*** (0.000)

−4.058^*** (0.000)

−2.719^*** (0.000)

Leverage

−0.015^*** (0.000)

−0.372^*** (0.000)

−5.259^*** (0.000)

1.447^*** (0.000)

Growth

0.075^*** (0.000)

0.502^*** (0.000)

10.751^*** (0.000)

−0.7468^*** (0.000)

Profit margin

0.069^*** (0.000)

−0.546^*** (0.000)

−3.891^*** (0.000)

−9.970^*** (0.000)

Payout ratio

0.008^*** (0.004)

0.291^*** (0.000)

4.164^*** (0.000)

1.4096^*** (0.000)

Firm-year observations

1976

1976

1976

1976

Firms

152

152

152

152

Instrument rank

126

126

126

126

AR(1) P-values

0.0025

0.0011

0.00264

0.0021

AR(2) P-values

0.55

0.6185

0.3305

0.920

J-Statistics of over-identifying restrictions (P-value)

0.2282

0.2028

0.226

0.1920

Year Effects

Yes

Yes

Yes

Yes

Industry Effects

Yes

Yes

Yes

Yes