Table 3: Estimated regression equation of sales performance adjusted R-square: Dependent 0.88 Question 1 variable: Sales performanceSig. It is a widely held belief that the quality of a firm's management practices is associated with the firm'sprofitability and sales performance. The World Management Survey (WMS) is an initiative that attempts to generate evidence to assess this belief F (6, 624): 782.64 in actual data (see http://worldmanagementsurvey.org). The WMS gathers data by administering in-depth surveys using 0.000 phone interviews with managers at the sampled firms Std. Error One of the datasets available through the WMS contains data on 631 firms from France, Germany, the United Kingdom, Management quality 0.131 0.026 and the United States. Table 1 shows several variables describing the performance, quality of management practices, and Firm size 0.978 other characteristics of these 631 firms. Firm age -0.007 0.022 Table 1: Variable descriptions French firm 0.010 0.055 Variable Description Mean Std. Dev Minimum Maximum 18.27 German firm 0.009 0.052 Profitability Earnings before interest and taxes/Capital employed 15.66 -25 50 UK firm -0.229 0.054 Sales performance Logarithm of sales 11.98 1.37 7.26 15.21 Management quality Continuous variable ranging from 1 (bad' managementpractices) to 5 constant) 5.105 0.147 good management practices) 3.23 0.76 1.06 4.86 Firm size Logarithm of number of employees 6.86 1.27 3.09 9.58 Firm age Logarithm of firm age in years 3.80 0.90 1.39 8.54 b. Calculate 95% confidence intervals for the regression coefficients in tables 2 and 3. Using these confidence French firm Eum is French (1): firm is not French (0) 0.18 0.39 intervals, which independent variables are significantly associated with botha firm's profitability and sales German firm 0.40 performance? Firm is German (1); firm is not German (0) 0.20 UK firm Eum is UK firm (1): firm is not UK firm (0) 0.18 0.39 Public firm Eum is public (1): firm is privately held (0) 0.59 0.49 C. What is the estimated difference in profitability between firms that have bad management practices and those Competition 1 = no competitors; 2 = few competitors; 3 = many that have good management practices? Similarly, what is the estimateddifference in sales performance competitors 2.47 0.52 3 between firms that have normal management practices (Management quality = 3) and those that have good management practices? a. How many US firms are in the sample? And how many sample firms are privately held? d. How much better or worse are the profitability and sales performance of US firms comparedto French, German, and UK firms, respectively? Tables 2 and 3 show regression equations to investigate the association between firms' managementquality on the one hand, and profitability and sales performance on the other. Next, one might wonder how differences in management quality can be explained. Table 4 shows aregression equation to assess some variables that may be associated with firms' management quality. Table 2: Estimated regression equation of profitability adjusted R-square: 0.13 Table 4: Estimated regression equation of management quality adjusted R-square: Dependent 0.06 Dependent variable:F (6, 624): 16.87 Profitability Sig.: variable Management qualitySig.: F (7, 623): 6.93 0.000 0.000 Std. Error Std. Error Management quality 2.433 0.82 Public firm -0.037 0.092 Firm size 1.886 0.521 Competition 0.157 0.057 Firm age -0.737 0.721 French firm -6.891 1.765 Firm size 0.117 0.025 German firm -11.332 1.668 Firm age -0.104 .035 UK firm -7.645 1.746 French firm -0.086 0.114 (constant) 2.866 4.758 German firm 0.043 0.098 UK firm -0.237 (constant) 2.504 0.250 First, compared to firms that are privately held, firms that are public may have higher management quality due to shareholder pressures. Second, firms experiencing more competition may have highermanagement quality due to competitive pressures.e. At a = 0.01, and using the critical value approach, does Table 4 support these twoexpectations? The 95% confidence interval for the regression estimate of 'UK firm' is {-0.4413; -0.0335}. f. Calculate the standard error for the regression estimate of 'UK firm'. Do US firms have ahigher management quality than UK firms