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Interpret the preceding regression

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Reference no: EM131909478

From a sample of 209 ?rms, Wooldridge obtained the following regression results*:

log (s-alary ) =  4.32  +  0.280 log (sales) +  0.0174 roe +  0.00024 ros 
se = (0.32)                   (0.035)                   (0.0041)         (0.00054)
R2 = 0.283

where salary = salary of CEO sales = annual ?rm sales roe = return on equity in percent ros = return on ?rm's stock and where ?gures in the parentheses are the estimated standard  errors.

a. Interpret the preceding regression taking into account any prior expec- tations that you may have about the signs of the various coef?cients.

b. Which of the coef?cients are individually statistically signi?cant at the 5 percent level?

c. What is the overall signi?cance of the regression? Which test do you use? And why?

d. Can you interpret the coef?cients of roe and ros as elasticity coef?cients? Why or why not?

Reference no: EM131909478

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