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From a sample of 209 firms, Wooldridge obtained the following regression result log( salary )=4.32+0.280log( sales )+0.0174 roe +0.00024 ros se=(0.32)(0.035)(0.0041)(0.00054) where salary = salary
From a sample of 209 firms, Wooldridge obtained the following regression result log( salary )=4.32+0.280log( sales )+0.0174 roe +0.00024 ros se=(0.32)(0.035)(0.0041)(0.00054) where salary = salary of CEO sales = annual firm sales roe = return on equity in percent ros = return on firm's stock and figures in the parentheses are the estimated standard errors. a) Interpret the preceding regression taking into account any prior expectations you may have about the signs of the various coefficients. b) Which of the coefficients are individually statistically significant at the 5% level? c) What is the overall significance of the regression? Which test do you use, why? d) Can you interpret the coefficients of roe and ros as elasticity coefficients? Why
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