This is the same specification as model 2 of Table 2 in Fairfield and Yohn (2001). As they point out, there is no hypothesized reason to include the level of PM or ATO since they only capture a firm’s operating strategy. Nonetheless, they are included in my analysis to ensure comparability with prior studies. Note that both Equation (1) and (2) are also estimated using the AB and RSST controls.