英语论文网

the samples, Pi,t is price per share (market value) of equity for firm i at the end of period t; Ei,t is the annualized earnings per share for time I in period t; Bi,t is the book value per share for firm i at the end of time t. The samples are classified into three groups, the cutoff points are determined to ensure an equal number of observations in each group using the rankings according to Ei,t /Bi,t-1 for Equation [4] and Bi,t-1 /Ei,t for Equation [5]. The three groups are: L for unsuccessful firms or low earnings firms (earnings less than Cut off 1), M for middle of the road firms (earnings between Cut off 1 and Cut off2) and H for successful firms or high earnings firms (earnings greater than Cut off 2). As mentioned above, unsuccessful firms (L) are excluded from the regressions as the base case (Asokan et al. 2006).

Using ordinary least squares, as regression proposed by White (1980), a consistent estimate of covariance matrix allowing heteroscedasticity should be computed. The coefficient themselves do not change, only the standard deviations. Moreover, in order to control for distorted results because of possible extreme observations, any observation are omitted for which the residual was larger than three standard deviations for each of the five models. This ensures that the results are not driven by outliers. (Asokan et al. 2006)

4.2 Analysis

Descriptive statistics for the data are shown in Table 2. As can be observed, the ratio of market to book value shows wide fluctuations over time, as evidenced by high standard deviation values and substantial changes in the mean values across periods. In the recent years, the potential for Chinese stock market growth has attracted foreign institutional investors and global investors. The annual rates of return for the Shanghai and Shenzhen composite indices in China were 81.7 percent and 66.3 percent during 2006 respectively (Liu et al. 2009).

At the same time, this rapid growth has been accompanied by high risk. Generally, however, the mean values decrease from 2001 to the end of 2006, and the standard deviation values tend to become small from 2001 to the middle of 2006. Although both the mean values and the standard deviation value increase from 2006 to the end of 2008, they are not as high as the values at beginning of the sample period. This downward trend may be a reflection of the level of maturity in Chinese stock market as a result of the development and improvement of Chinese economy and stock market in nearly 20 years.

After 1999, at the background of favorable balance of trade, the market entered a process of fast increase. The growth of favorable balance of trade can give an impetus to the revaluation of assets. It is important not only to the reasons for the favorable balance of trade could have a large number of mobility; and the expansion of favorable balance of trade is a reflection of the fact that excess capacity, the existence of excess production capacity to suppress inflationary pressures in the economy, resulting in more generous monetary and credit creation process in reality.

Therefore, in the view of the revaluation of assets, the trade surplus and capital inflows can be formed to create liq本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。