Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/60083
Title: Does income smoothing improve earnings informativeness? – a comparison between the US and China markets
Authors: Cheng, CSA 
Li, S
Keywords: Aggregation
Long intervals
Returns-Earnings Association
Issue Date: 2014
Publisher: Hong Kong Polytechnic University
Source: China accounting and finance review (中國會計與財務硏究), June 2014,v. 16, no. 2, p. 128-147 How to cite?
Journal: China accounting and finance review (中國會計與財務硏究) 
Abstract: Tucker and Zarowin (2006) examine the impact of income smoothing on earnings informativeness, as proxied by the future earnings response coefficient (FERC). In this paper, we replicate Tucker and Zarowin (2006) and compare the results between the US and China markets. Specifically, using a sample of US firms from 2003 to 2008, we first find results consistent with Tucker and Zarowin (2006) that income smoothing improves FERC. However, our analysis for the China market over the same sample period indicates that income smoothing has little impact on FERC. Within the China market, we further find that income smoothing does not affect FERC for state-owned enterprises (SOEs) but weakly affects FERC for non-state-owned enterprises (non-SOEs). We argue that the market-level differences in information environment partly account for the differential impacts of income smoothing on FERC.
URI: http://hdl.handle.net/10397/60083
ISSN: 2307-3055 (eISSN)
DOI: 10.7603/s40570-014-0004-4
Rights: © The Author(s) 2014. This article is published with open access by The Hong Kong Polytechnic University.
Open Access. This article is distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/) which permits any use, distribution, and reproduction in any medium, provided the original author(s) and the source are credited.
Appears in Collections:Journal/Magazine Article

Files in This Item:
File SizeFormat 
Cheng_Income_Smoothing_Improve.pdf487.45 kBAdobe PDFView/Open
Access
View full-text via PolyU eLinks SFX Query
Show full item record

Page view(s)

11
Last Week
3
Last month
Checked on Feb 19, 2017

Download(s)

7
Checked on Feb 19, 2017

Google ScholarTM

Check

Altmetric



Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.