Panel A: results of the correlation between cost stickiness and the possibility of future losses

Panel B: results of the correlation between cost stickiness and audit costs

Variable

Explained variable—later_loss

Variable

Explained variable—ln_auditfee

Cross-section regression

Panel regression

Mixed regression

Fixed effect

(1)

(2)

(1)

(2)

dcscost

2.053***

1.875***

dcscost

0.137**

0.078**

(5.47)

(4.39)

(2.29)

(2.34)

size

−0.296***

−0.256***

size

0.366***

0.339***

(−11.76)

(−7.90)

(46.74)

(33.15)

lev

1.432***

1.445***

lev

0.035

0.014

(10.16)

(8.19)

(0.96)

(0.42)

cfratio

−0.839***

−0.911***

cfratio

0.057

−0.026

(−5.07)

(−4.34)

(1.39)

(−0.62)

growth

−0.046***

−0.051***

growth

0.001

−0.000

(−8.31)

(−8.30)

(0.71)

(−0.25)

loss

0.590***

−0.166

loss

0.068***

0.021***

(7.01)

(−1.64)

(5.05)

(2.70)

ownership

−1.075***

−1.471***

ownership

−0.100**

0.068

(−5.81)

(−6.11)

(−2.20)

(1.08)

stock_e

−0.816***

−1.011***

stock_e

−0.118***

−0.084*

(−3.28)

(−3.36)

(−2.86)

(−1.71)

same

0.037

0.063

same

0.025*

0.008

(0.58)

(0.81)

(1.96)

(0.80)

EID

0.310

−0.044

EID

0.190*

−0.036

(0.66)

(−0.08)

(1.83)

(−0.51)

big4

0.729***

0.265***

(18.19)

(5.46)

audittype

0.183***

0.094***

(8.02)

(5.70)

_cons

3.266***

2.315***

_cons

5.075***

5.888***

(5.64)

(3.12)

(29.26)

(26.40)

Ind./Year

Yes

Yes

Ind./Year

Yes

Yes

N

20,400

20,400

N

22,868

22,887

adj-R²

-

-

adj-R²

0.672

0.645

F

-

-

F

429.2***

405.77***