Estimates and Diagnostic information on Competing Models 

A financial analyst seeks to examine the effect of capital structure on debt financing in selected listed companies. Five companies were selected and followed for 10-year period. Information derived from the selected companies’ financial statements were used to calculate the Debt to Equity (DER), Long-Term Debt to Equity (LDR), Short-Term Debt to Equity (SDR), and Total Debt to Total Equity (TDTE). The dependent variable which is debt financing uses TDTE as a proxy variable. Three competing models were fitted to the dataset and the output is presented in Table 1.

Table 1: Estimates and Diagnostic information on Competing Models