Appendix Table 1 White Heteroskedasticity Test

Appendix

Table 1 White Heteroskedasticity Test

ROA01 ROE01 ROA05 ROE05 IROA IROE

Model 1

F-statistic

(Probability)

0.827

(0.636)

0.567

(0.878)

1.797

(0.063)

0.836

(0.628)

0.613

(0.842)

1.191

(0.308)

Model 2

F-statistic

(Probability)

0.684

(0.761)

0.663

(0.781)

2.931

(0.002)

4.898

(0.000)

0.436

(0.943)

0.907

(0.554)

Table 2 VIF of Model 1

Variables

ROA01

ROE01

ROA05

ROE05

IROA

IROE

Experience

1.286

1.278

1.286

1.277

1.286

1.278

ROA94

1.380

1.348

1.380

ROE94

1.175

1.162

1.175

Age

1.143

1.163

1.139

1.158

1.143

1.163

Size

1.718

1.629

1.713

1.167

1.718

1.629

Gearing01

1.220

1.201

1.220

1.201

Gearing05

1.019

1.016

Diversity

1.507

1.488

1.512

1.484

1.507

1.488

Asia

1.598

1.615

1.544

1.558

1.598

1.615

North

America

1.673

1.653

1.669

1.641

1.673

1.653

Africa

1.073

1.066

1.072

1.006

1.073

1.066

Table 3 VIF of Model 2

Variables

ROA01 ROE01

ROA05

ROE05

IROA

IROE

Experience

1.286

1.286

1.273

1.273

1.286

1.286

Age

1.156

1.156

1.182

1.182

1.156

1.156

Size

1.469

1.469

1.500

1.500

1.469

1.469

Gearing01

1.145

1.145

1.145

1.145

Diversity

1.449

1.449

1.362

1.362

1.449

1.449

Asia

1.394

1.394

1.413

1.413

1.394

1.394

North

America

1.416

1.416

1.371

1.371

1.416

1.416

Africa

1.109

1.109

1.113

1.113

1.109

1.109

Eviews Output for Model 1

Method: Least Squares Date: 09/02/07 Time: 19:40 Sample: 1 73

Included observations: 73

Variable Coefficient Std. Error t-Statistic Prob.

C -3.030396 4.449567 -0.681054 0.4985 EXPERIENCE -0.193590 0.158131 -1.224237 0.2256 ROA94 0.405166 0.212935 1.902768 0.0619 AGE 0.036447 0.061490 0.592723 0.5556 SIZE 0.112756 0.655026 0.172140 0.8639 GEARING01 -0.008042 0.013029 -0.617250 0.5394 DIVERSITY 4.680398 2.506030 1.867654 0.0667 ASIA 0.432352 2.564408 0.168597 0.8667 AMERICA 4.121175 2.940174 1.401677 0.1662 AFRICA -7.336157 8.675663 -0.845602 0.4011

R-squared 0.264733 Mean dependent var 2.333000

Adjusted R-squared 0.148443 S.D. dependent var 8.804617

S.E. of regression 8.313522 Akaike info criterion 7.205207

Sum squared resid 4146.879 Schwarz criterion 7.526421

Log likelihood -242.1823 F-statistic 1.932521

Durbin-Watson stat 2.015454 Prob(F-statistic) 0.012175

Dependent Variable: ROE01 Method: Least Squares Date: 09/02/07 Time: 19:42 Sample: 1 73

Included observations: 73

SIZE 0.113244 1.388315 0.081569 0.9353 GEARING01 -0.049453 0.028140 -1.757378 0.0840 DIVERSITY 7.285742 5.419992 1.344235 0.0939 ASIA -3.699356 5.609534 -0.659476 0.5121 AMERICA 3.083469 6.361615 0.484699 0.6297 AFRICA -16.18770 18.82113 -0.860081 0.3932 R-squared 0.273249 Mean dependent var 5.127286 Adjusted R-squared 0.186237 S.D. dependent var 18.33656 S.E. of regression 18.09442 Akaike info criterion 8.760647 Sum squared resid 19644.47 Schwarz criterion 9.081861 Log likelihood -296.6227 F-statistic 1.206567 Durbin-Watson stat 2.102670 Prob(F-statistic) 0.011065 Dependent Variable: ROA05

Method: Least Squares Date: 09/02/07 Time: 19:44 Sample: 1 73

Included observations: 73

Variable Coefficient Std. Error t-Statistic Prob. C 10.06231 2.679933 3.754687 0.0004 EXPERIENCE 0.042134 0.106370 0.396112 0.6934 ROA94 0.408524 0.141586 2.885330 0.0054 AGE 0.028115 0.041293 0.680881 0.4986 SIZE -1.281686 0.440099 -2.912265 0.0050 GEARING05 -0.018194 0.007210 -2.523573 0.0143 DIVERSITY 2.669140 1.688536 1.580742 0.0992 ASIA 1.157957 1.695573 0.682929 0.4973 AMERICA 3.920442 1.975886 1.984144 0.0518 AFRICA 6.707477 5.834356 1.149652 0.2548 R-squared 0.310057 Mean dependent var 5.179143 Adjusted R-squared 0.203565 S.D. dependent var 6.190086 S.E. of regression 5.593163 Akaike info criterion 6.412531 Sum squared resid 1877.008 Schwarz criterion 6.733744 Log likelihood -214.4386 F-statistic 2.723752 Durbin-Watson stat 1.947017 Prob(F-statistic) 0.007874 Dependent Variable: ROE05

Method: Least Squares Date: 09/02/07 Time: 19:56 Sample: 1 73

Included observations: 73

EXPERIENCE 0.030210 0.307315 0.098304 0.9220 ROE94 0.367092 0.120329 3.050740 0.0034 AGE 0.054862 0.120720 0.454461 0.6511 SIZE -2.158025 1.239452 -1.741112 0.0868 GEARING05 -0.031842 0.020867 -1.525957 0.0723 DIVERSITY 6.054734 4.849356 1.248565 0.2167 ASIA 2.387527 4.936982 0.483601 0.6304 AMERICA 6.323525 5.679540 1.113387 0.2700 AFRICA 10.79424 16.86150 0.640171 0.5245 R-squared 0.253341 Mean dependent var 14.68071 Adjusted R-squared 0.178342 S.D. dependent var 17.26680 S.E. of regression 16.21295 Akaike info criterion 8.541061 Sum squared resid 15771.58 Schwarz criterion 8.862274 Log likelihood -288.9371 F-statistic 2.029069 Durbin-Watson stat 1.842543 Prob(F-statistic) 0.009302 Dependent Variable: IROA

Method: Least Squares Date: 09/02/07 Time: 21:52 Sample: 1 73

Included observations: 73

Variable Coefficient Std. Error t-Statistic Prob. C 14.44366 4.726499 3.055889 0.0033 EXPERIENCE 0.237492 0.187601 1.265945 0.2104 ROA94 -0.018888 0.249711 -0.075641 0.9400 AGE -0.010769 0.072826 -0.147876 0.8829 SIZE -1.415431 0.776187 -1.823569 0.0732 GEARING01 0.019024 0.012715 1.496175 0.1399 DIVERSITY -2.096994 2.978008 -0.704160 0.4841 ASIA 0.406053 2.990421 0.135784 0.8924 AMERICA -0.088443 3.484797 -0.025380 0.9798 AFRICA 13.88272 10.28984 1.349168 0.1824 R-squared 0.201246 Mean dependent var 2.846143 Adjusted R-squared 0.133933 S.D. dependent var 9.984662 S.E. of regression 9.864457 Akaike info criterion 7.547317 Sum squared resid 5838.450 Schwarz criterion 7.868530 Log likelihood -254.1561 F-statistic 1.187986 Durbin-Watson stat 2.321388 Prob(F-statistic) 0.012313 Dependent Variable: IROE

Included observations: 73

Variable Coefficient Std. Error t-Statistic Prob. C 21.63944 11.64584 1.858126 0.0681 EXPERIENCE 0.248346 0.413571 0.600493 0.5504 ROE94 0.254475 0.162768 1.563426 0.1232 AGE -0.182629 0.162742 -1.122202 0.2662 SIZE -2.341039 1.673356 -1.399009 0.0871 GEARING01 0.031420 0.033918 0.926358 0.3580 DIVERSITY -2.022869 6.532792 -0.309648 0.7579 ASIA 5.812917 6.761250 0.859740 0.3934 AMERICA 3.992983 7.667744 0.520751 0.6045 AFRICA 26.78579 22.68537 1.180751 0.2424 R-squared 0.192232 Mean dependent var 9.553429 Adjusted R-squared 0.143567 S.D. dependent var 21.95892 S.E. of regression 21.80945 Akaike info criterion 9.134128 Sum squared resid 28539.14 Schwarz criterion 9.455341 Log likelihood -309.6945 F-statistic 1.105444 Durbin-Watson stat 2.236990 Prob(F-statistic) 0.018979

Eviews Output for Model 2

Dependent Variable: ROA01 Method: Least Squares Date: 09/02/07 Time: 18:02 Sample: 1 108

Included observations:108

Dependent Variable: ROE01 Method: Least Squares Date: 09/02/07 Time: 18:03 Sample: 1 108

Included observations: 108

Variable Coefficient Std. Error t-Statistic Prob. C 5.234710 7.514691 0.696597 0.4881 EXPERIENCE -0.331221 0.307578 -1.076870 0.2849 AGE 0.064287 0.084343 0.762205 0.4482 SIZE 0.662327 1.140594 0.580686 0.5631 GEARING01 -0.059299 0.015478 -3.831177 0.0003 DIVERSITY 3.268608 4.465271 0.732007 0.4664 ASIA -2.484660 4.679574 -0.530959 0.5970 NORTHAMERICA 8.838712 4.929694 1.792953 0.1069 AFRICA -14.41049 13.01287 -1.107404 0.2715 R-squared 0.258232 Mean dependent var 6.257356 Adjusted R-squared 0.179076 S.D. dependent var 18.72362 S.E. of regression 17.27170 Akaike info criterion 8.633713 Sum squared resid 23268.31 Schwarz criterion 8.888807 Log likelihood -366.5665 F-statistic 2.883330 Durbin-Watson stat 1.623072 Prob(F-statistic) 0.007254 Dependent Variable: ROA05

Method: Least Squares Date: 09/02/07 Time: 20:18 Sample: 1 108

Included observations:108

White Heteroskedasticity-Consistent Standard Errors & Covariance Variable Coefficient Std. Error t-Statistic Prob.

Durbin-Watson stat 1.413205 Prob(F-statistic) 0.000000 Dependent Variable: ROE05

Method: Least Squares Date: 09/02/07 Time: 20:09 Sample: 1 108

Included observations: 108

White Heteroskedasticity-Consistent Standard Errors & Covariance Variable Coefficient Std. Error t-Statistic Prob.

C 17.87053 7.467289 2.393174 0.0193 EXPERIENCE -0.187439 0.175348 -1.068951 0.2886 AGE -0.072134 0.058402 -1.235121 0.2207 SIZE -1.137749 1.214091 -0.937120 0.3518 GEARING05 -0.047070 0.015804 -2.978407 0.0039 DIVERSITY 13.08325 4.533930 2.885631 0.0051 ASIA -1.853717 2.876015 -0.644544 0.5212 NORTHAMERICA 9.503688 4.794606 1.982163 0.0512 AFRICA 3.660106 5.656281 0.647087 0.5196 R-squared 0.331773 Mean dependent var 12.06220 Adjusted R-squared 0.258542 S.D. dependent var 14.99645 S.E. of regression 12.91313 Akaike info criterion 8.057619 Sum squared resid 12172.68 Schwarz criterion 8.321771 Log likelihood -321.3624 F-statistic 4.530533 Durbin-Watson stat 1.676987 Prob(F-statistic) 0.000167 Dependent Variable: IROA

Method: Least Squares Date: 09/02/07 Time: 18:01 Sample: 1 108

Included observations:108

Sum squared resid 8329.499 Schwarz criterion 7.861518 Log likelihood -321.8794 F-statistic 1.153568 Durbin-Watson stat 2.208287 Prob(F-statistic) 0.018006 Dependent Variable: IROE

Method: Least Squares Date: 09/02/07 Time: 17:59 Sample: 1 108

Included observations:108