92 Executive Stock Options, Corporate Cash Holdings and M&A Decisions First Stage Second Stage (Dep: MAt) Vega Delta (1) Full Sample (2) All-Cash Deals (3) Within Industry Sample (4) Within Industry & All-Cash Deals Market_to_Bookt-1 EBITDA/TAt-1 Stock returnt-1 Industry M&A liquidityt-1 Herfindahl indext-1 Market leveraget-1 InsideOwnt-1 0.126*** (14.55) -0.482*** (-5.25) 0.0247* (1.81) 0.171 (1.19) 0.0664** (2.15) -0.685*** (-17.57) 0.0217*** (13.11) -0.138*** (-6.92) -0.0124*** (-4.88) 0.0671** (2.07) -0.0042 (-0.67) -0.133*** (-16.27) -0.0168*** (-2.86) 0.0919** (2.04) 0.0210*** (2.77) 0.337*** (4.37) -0.0284 (-1.25) -0.128*** (-3.47) -0.00097 (-1.01) -0.0102*** (-2.64) 0.0259 (0.85) 0.00259 (0.46) 0.238*** (4.58) -0.0482*** (-2.74) -0.133*** (-5.26) -0.00051 (-0.70) -0.0116*** (-2.74) 0.0592* (1.78) 0.0180*** (2.99) 0.162*** (2.97) -0.0696*** (-3.87) -0.0181 (-0.69) 0.00037 (0.59) -0.00577** (-2.03) 0.0159 (0.78) 0.00186 (0.46) 0.145*** (3.88) -0.0597*** (-4.03) -0.0496*** (-2.79) -0.00001 (-0.03) Year fixed effect Industry fixed effect Firm fixed effect Number of observations Yes Yes No 10,867 Yes Yes No 10,867 Yes No Yes 10,867 Yes No Yes 10,035 Yes No Yes 10,146 Yes No Yes 9,611 Noet: The table examines how the excess cash impacts the corporate bidding decision induced by the incentive compensation. All variables are defined in the same way as shown in the Appendix. Panel A shows the results in the marginal effect of probit model that controls for time fixed effect. Panel B exhibits the results estimated by two-stage least squares equations. The first stage equation is estimated by the OLS regression that controls for the time-fixed and industry-fixed effects. The second stage equation is estimated by probit model that controls for the time-fixed and firm-fixed effects. The t-statistics are reported in parentheses. ***, **, and * denote significance at the 1%, 5%, and 10% levels, respectively. Table 3 The Effect of Excess Cash on the ESOs-Induced Corporate M&A Decision (cont.) Panel B: Two-Stage Least Squares
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