The Market Valuation of Managed Earnings in a Regulatory Setting With Learning Opportunities
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Authors
Godsell, David
Date
2015-10-03
Type
thesis
Language
eng
Keyword
Price-Earnings Model , Market Valuation , Earnings Management
Alternative Title
Abstract
This dissertation examines the market valuation of earnings announced by U.S. firms initiating or reinitiating antidumping trade investigations against foreign exporters. Trade investigations are an interesting setting because firms petitioning the trade regulator for import relief face strong incentives to manage earnings to increase the likelihood and magnitude of import relief. In addition, the setting allows an examination of opportunities for investors to learn about earnings management because (1) investigation initiation dates and determinations are in the public domain and (2) some firms initiate investigations more than once. Import relief firms’ diverse investor base further enriches the research setting and allows for a study of investor learning by both more and less sophisticated investors. Using cross-sectional, time-series and size-matched samples and a valuation model that relates stock prices to accounting book values and earnings, I find an attenuated price-earnings relation for antidumping investigation-initiating firms only in the presence of an opportunity to learn and primarily when the firm has higher levels of following by sophisticated investors. That is, the price-earnings relation in the valuation model is attenuated only when firms with sophisticated shareholders initiate their second or subsequent antidumping investigation. This dissertation contributes to the accounting literature by shedding light on which market participants learn to identify firms’ incentives to engage in earnings management.
Description
Thesis (Ph.D, Management) -- Queen's University, 2015-10-02 13:49:34.282
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ProQuest PhD and Master's Theses International Dissemination Agreement
Intellectual Property Guidelines at Queen's University
Copying and Preserving Your Thesis
Creative Commons - Attribution - CC BY
This publication is made available by the authority of the copyright owner solely for the purpose of private study and research and may not be copied or reproduced except as permitted by the copyright laws without written authority from the copyright owner.