An empirical study on information content of accounting earnings and cash flow

Based on deep analyzing the colluding and checking relation of income statement and cash flow statement, this paper chooses and designs the corresponding profit index, carries on the comparative study of information content between accounting earnings and cash flows. The paper utilizes the financial data of Chinese listed company in manufacturing industry from 2003 to 2005, adopts the price model and analyzes empirical study about two kinds of profit indexes and value relevance. Studies have suggested： accounting earnings and cash flows all have relevant relations to stock prices; however, the relevance between cash flow and stock price is stronger, and cash flows have higher information quality.     

A note on CEO compensation, elimination tournaments and bankruptcy risk

We investigate an economy in which firms have different risks to go bankrupt. We observe two things: first, workers in firms with higher bankruptcy risk (bad firms) always work less than workers in good firms. Second, the CEOs of bad firms may nonetheless receive larger wages.JEL Classification: J40, L20, M50Alexander Matros: We are grateful to Karl Wärneryd and an anonymous referee for helpful suggestions. Much of this paper was written while Matros was a Research Fellow at University College London and Friebel was at SITE, Stockholm. We are grateful for their research environmennt. The support of the Economic and Social Research Council (ESRC) is gratefully acknowledged. This work was part of the programme of the ESRC Research Center for Economic Learning and Social Evolution.