Question: The following table was created using the data in CEOSAL2, where standard errors are in parentheses below the coefficients: The variable mktval is market value

The following table was created using the data in CEOSAL2, where standard errors are in parentheses below the coefficients:

Independent Variables log(sales) log(mktval) Profmarg Ceoten Dependent Variable: log(salary) (1) (2) (3)

The variable mktval is market value of the firm, profmarg is profit as a percentage of sales, ceoten is years as CEO with the current company, and comten is total years with the company.
(i) Comment on the effect of profmarg on CEO salary.
(ii) Does market value have a significant effect? Explain.

Independent Variables log(sales) log(mktval) Profmarg Ceoten Dependent Variable: log(salary) (1) (2) (3) 224 .158 .188 (.027) (.040) (.040) .112 .100 (.050) (.049) -.0023 -.0022 (.0022) (.0021) .0171 (.0055) comten intercept 4.94 4.62 (0.20) (0.25) Observations 177 177 R-squared .281 .304 -.0092 (.0033) 4.57 (0.25) 177 .353

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