Time series models based upon the reported accounting data of Abbott Laboratories Inc. are used to forecast its one-year-ahead raw returns over hold-out periods of 1, 4 and 10 years. The sample data is annual, from 1955 to 2003. A general-to-specific, testing down, modelling method is used. The models suggest market values are corrected for imbalances between expected and actual market values i...

We show that the post-earnings announcement drift (PEAD) is stronger for conglomerates than single-segment firms. Conglomerates, on average, are larger single segment firms, so it unlikely limits-to-arbitrage drive difference in PEAD. Rather, we hypothesize market participants find more costly and difficult to understand firm-specific earnings information regarding conglomerates, as they have c...

The purpose of this study is to examine the possible impact of value systems on earnings management in France, Tunisia and Canada. Cultural values include power distance, uncertainty avoidance, individualism, masculinity and long-term orientation. The cross-cultural study uses the method of structural equations trough LISREL approach. The examination covers the period between 2003 and 2009. Fin...

Supply chain partnership involves mutual commitments among participating firms. One example is early order commitment, wherein a retailer commits to purchase a fixed-order quantity and delivery time from a supplier before the real need takes place. This paper explores the value of practicing early order commitment in the supply chain. We investigate the complex interactions between early order ...

This study uses the segmented dual-class shares of Chinese firms---A shares traded inside mainland China by local investors and H shares traded in Hong Kong by foreign investors---to analyze how local and foreign investors react to public news about the same firms. We find significant heterogeneity in their reactions. First, foreign investors react more strongly to earnings announcements. Secon...

This paper compares the informativeness of discretionary research and development (R&D) capitalization under IAS 38 with non-discretionary “as-if” R&D capitalization. While prior consistently demonstrated capital market benefits capitalization, evidence for reported are less favorable due to earnings management concerns. Because studies based on adjusted data assuming resulting numbers free fro...

A variety of alternative definitions and sources of actual earnings realizations are available to investors. In addition to “traditional” earnings numbers produced in conformity with generally accepted accounting principles (GAAP) and filed with the Securities and Exchange Commission (SEC), these alternative measures include the so-called Street earnings numbers that are based on proprietary de...