Evidence that financing decisions contribute to the zero-earnings discontinuity

Abstract In this paper we argue that financing decisions contribute to the zero-earnings discontinuity. We find a discontinuity in distribution of earnings before tax and special items, but not interest which suggests expense contributes To investigate role discontinuity, further show there was level debt issues around zero contemporaneous with also recent disappearance is coincident issuance distribution. Overall, our findings suggest contributed when it existed.