The following table was created using the data in CEOSAL2.RAW:

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 comtenis total years with the company.
(i) Comment on the effect of profmarg on CEO salary?
(ii) Does market value have a significant effect? Explain.
(iii) Interpret the coefficients on ceoten and comten. Are these explanatory variables statistically significant?

Transcribed Image Text:

Dependent Variable: log(salary) Independent Variables log(sales) log(mktval) protmar8 .158 (.040) .112 (.050) -0023 (.0022) 188 (.040) .100 049) ,0022 (.0021) 0171 (.0055) -0092 (.0033) 224 (.027) ceoten comten 4.94 (0.20) 4.62 0.25) 4.57 (0.25) intercep Observations R-squared 281 304 353