英语论文网

rise across the groups: [(β12 =-0.505)<(β12+β13 =1.319)<(β12+β14=1.932)]. -0.505 for unsuccessful companies (low ratio of BV/E value); 1.319 for the middle of the road companies (medium ratio of BV/E value); and 1.932 for the successful companies (high ratio of BV/E value).

The coefficients estimates on earnings and book values are consistent with their values in theory and findings of Burgstahler and Dichev (1997) for U.S. companies. However, though the results are similar showing similar relationships, a difference is that the models which use Chinese data had much bigger adjusted R2s than the model in the Burgstahler and Dichev (1997) research. In the case of the first linear model (Equation [1]) which contains earnings as the dependent variable, the research of Burgstahler and Dichev (1997) reported an average adjusted R2 of 0.11, that is, approximately 10%. In this study, however, an average adjusted R2 of 0.408 by using Chinese stock market data, approximately 40%.

The much relevant results with Chinese data mean that, a great number of variables may be impacting equity values in the U.S. or developed markets. In a developing market like China, however, equity value of a firm may be influenced by only some very limited variables. In the relatively smaller, limited and less complex capital market of China, the restricted disclosure of information to investors as well as small number of market participants may be among the reasonable reasons on a basis of this observation.

Table 6 Market value of Chinese firms as function of earnings with dummy variables to represent successful and middle of the road firms between 2001-6-30 and 2008-12-31

Note: tα3 is the t-statistic for α3; t5 is the t-statistic for α3+β5; t6 is the t-statistic for α3+β6; t7 is the t-statistic for β7; t8 is the t-statistic for β7+β8; t9 is the t-statistic for β7+β9. The statistical significance for tα3, t5, t6, t7, t8 and t9 is at 10% level. 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 firm i in period t; Bi,t is book value per share for firm i at the end of period t. The table contains estimates of the coefficients for the piece-wise form relating Pi,t/Ei,t to Bi,t/Ei,t after controlling for firm “success” . The samples were classified into successful or high earnings’ firms (H), middle of the road (M), and unsuccessful or low earnings’ firms (L). Unsuccessful firms (L) are excluded from the regressions as the base case.

The cutoff points for this classification are determined in a way that there will be an equal number of observations, 334 firms, in each group using the rankings according to Ei,t/Bi,t-1. The cut-off points for the respective periods are given in the last two columns. Accordingly, the unsuccessful or low earnings firms (L): firms with Ei,t/Bi,t-1 less than Cutoff1, middle of the road firms (M): firms with Ei,t/Bi,t-1 between Cutoff1 and Cutoff2, and successful or high earnings firms (H): those with Ei,t/Bi,t-1 greater than Cutoff2. According to White 1980, all t-statistics are calculated based on the heteroscedasticity-consistent covariance matrix. The t-statistics for the groups H and M are the t-statistics for test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。