Hello,

Hi,

I estimate the following system GMM model based on a panel dataset of 1696 firms across 16 years.

Code:
Group variable: CompanyID                    Number of obs         =      6991
Time variable: Year                          Number of groups      =       671

Moment conditions:     linear =      53      Obs per group:    min =         1
                    nonlinear =       0                        avg =  10.41878
                        total =      53                        max =        15

                                       (Std. Err. adjusted for 671 clusters in CompanyID)
-----------------------------------------------------------------------------------------
                        |              WC-Robust
          CashHoldings1 |      Coef.   Std. Err.      z    P>|z|     [95% Conf. Interval]
------------------------+----------------------------------------------------------------
          CashHoldings1 |
                    L1. |   .5405655   .0639851     8.45   0.000      .415157     .665974
                        |
                  Size1 |  -.0015902   .0008944    -1.78   0.075    -.0033433    .0001628
              Leverage1 |   .0215192   .0201021     1.07   0.284    -.0178801    .0609186
             Liquidity1 |  -.0271283   .0128011    -2.12   0.034    -.0522179   -.0020386
         Profitability4 |   .1141001   .0356895     3.20   0.001       .04415    .1840502
GrowthPotential2TobinsQ |   -.008502   .0056203    -1.51   0.130    -.0195176    .0025135
      OperatingCashflow |   .0686659   .0150234     4.57   0.000     .0392205    .0981113
              Dividend2 |  -.0413027   .0341163    -1.21   0.226    -.1081693    .0255639
    CapitalExpenditure1 |  -.1140552   .0383933    -2.97   0.003    -.1893047   -.0388057
     CashFlowVol15years |   .1400365   .0454519     3.08   0.002     .0509524    .2291206
     WPromoterSharesin1 |  -.0117863   .0049264    -2.39   0.017    -.0214418   -.0021307
I use the following command to calculate long run coefficient for promoter.ownership (i.e. WPromoterS) which comes out to be -0.02565***.

Code:
nlcom (_b[ WPromoterSharesin1 ])/(1-_b[ L.CashHoldings1 ])
I am curious to know and understand the relevance and interpretation of this long run coefficient of promoter.ownership (i.e. WPromoterS).

Any help in this regard is highly appreciated.