The results for the test of the PC hypothesis are less consistent. The coefficient on
I ROS * PC is positive in all cases, but it is not always statistically significant at p 0.10.
When segment profits are defined using EBIT, the p-values of the coefficient of I ROS *
PC ranges from 0.11 in the 10 percent deviation sample to 0.51 in the 5 percent deviation
sample. When segment profits are defined using PTI, the results are stronger, with the pvalues
for I ROS * PC ranging from 0.01 in the 10 percent deviation sample to 0.25 in
the 5 percent deviation sample. Overall, we do not find robust results consistent with the
PC motive hypothesis.