Pension Plan Contributions, Free Cash Flows and Financial Slack

Legend: Bold indicates significant at .01 level of significance

Bold and italic indicates significant at .05 level of significance

Italic indicates significant at .10 level of significance

For variable definitions seen notes to Exhibit 1.

EXHIBIT 4

Firms partitioned into quartiles on the basis of FCFA

Coefficients (significant levels) on PENROA (b₂)

	1^st Quartile Lowest FCFA	2^nd Quartile	3^rd Quartile	4^th Quartile Highest FCFA
1991	.134 (0.0001)	-.026 (-----)	.046 (0.0038)	.073 (0.0001)
1992	.102 (0.0008)	.124 (0.0001)	.132 (0.0001)	.136 (0.0001)
1993	.076 (0.0031)	.099 (0.0001)	.065 (0.0001)	.035 (.1131)
1994	.174 (0.0024)	-.021 (-----)	.109 (0.0019)	-.032 (-----)
1995	-.025 (-----)	.028 (0.0463)	.043 (0.0003)	0.009 (.5185)
1996	0.109 (0.0001)	.089 (0.0001)	.168 (0.0001)	.105 (0.0001)

Legend: Bold indicates significant at .01 level of significance

Bold and italic indicates significant at .05 level of significance

Italic indicates significant at .10 level of significance

EXHIBIT 5

Results of tests for Hypothesis 2 and 3 for full sample

Panel A : Results of tests of Hypothesis 2

		ID			II		t-test	Wilcoxon
	N	Mean	Median	N	Mean	Median	Sig.	Sig.
Growth in capital expenditures
GCAPEX	1077	1.304	1.134	1916	1.268	1.097	0.146	0.065
GCAPEX t+1	1020	1.330	1.172	1819	1.280	1.126	0.081	0.034
Profitability measures
ROAt+1	1055	0.046	0.046	1891	0.028	0.041	0.159	0.001
INDROAt+1	1055	0.014	0.006	1891	0.000	0.003	0.211	0.022
AROAt+1	1055	0.044	0.046	1894	0.024	0.041	0.140	0.002
AINDROAt+1	1055	0.013	0.006	1894	-0.005	0.004	0.183	0.068

Panel B : Results of tests of Hypothesis 3

		ID			II		t-test	Wilcoxon
Return Measures	N	Mean	Median	N	Mean	Median	Sig.	Sig.
ANNRETt+1	994	25.053	19.350	1754	20.799	15.000	0.049	0.002
CUMRETt+1	488	77.962	62.350	948	69.212	53.650	0.040	0.037
SIZERETt+1	994	4.092	0.550	1754	2.144	-1.900	0.181	0.061
CUMSIZERETt+1	488	2.587	-7.300	949	0.504	-9.800	0.271	0.244