Can the earnings fixation hypothesis explain the accrual anomaly? |
| |
Authors: | Linna Shi Huai Zhang |
| |
Institution: | (1) Nanyang Business School, Nanyang Technological University, Nanyang Avenue, Singapore, 639798, Singapore;(2) State University of New York, Binghamton, NY, USA;; |
| |
Abstract: | This paper provides empirical evidence on whether the earnings fixation hypothesis can explain the accrual anomaly originally
documented in Sloan (1996). Our analytical model yields the prediction that, if investors fixate on reported earnings, the effectiveness of the accrual
strategy will increase in the responsiveness of the stock price to earnings and the differential persistence of cash flows
relative to accruals. Our empirical evidence confirms our prediction and lends support to the earnings fixation hypothesis. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|