Earnings response coefficient of banking shares: a multi-country study with control for risk
This paper reports new finding on earnings response coefficients of banking firms on how information disclosed regarding (i) total earnings and (ii) fee earnings is associated with share price changes around the time of financial report releases. This paper extends to banking firms a widely used ana...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Universiti Putra Malaysia Press
2013
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| Online Access: | http://psasir.upm.edu.my/id/eprint/28375/1/28375.pdf |
| _version_ | 1825947304164589568 |
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| author | Syed Mohamed, Mohamed Ariff Cheng, Fan Fah |
| author_facet | Syed Mohamed, Mohamed Ariff Cheng, Fan Fah |
| author_sort | Syed Mohamed, Mohamed Ariff |
| collection | UPM |
| description | This paper reports new finding on earnings response coefficients of banking firms on how information disclosed regarding (i) total earnings and (ii) fee earnings is associated with share price changes around the time of financial report releases. This paper extends to banking firms a widely used analysis of earnings response studies on non-banking firms. To obtain robust test results, we extended this common model, for the first time, by adding
control variables and also by applying panel regression. Changes in total earnings do influence share prices significantly in the four countries studied i.e. Malaysia, Thailand, South Korea and Australia. Australian investors appear to use disclosed information on fee income also to revise share prices significantly as being value relevant. Investors regard both total and fee incomes as equally important in Australia whereas investor actions in the
other three markets studied lead to weak evidence on fee income effect. This paper reports new findings on value relevance of disclosures extended to banking firms. |
| first_indexed | 2024-03-06T08:11:15Z |
| format | Article |
| id | upm.eprints-28375 |
| institution | Universiti Putra Malaysia |
| language | English |
| last_indexed | 2024-03-06T08:11:15Z |
| publishDate | 2013 |
| publisher | Universiti Putra Malaysia Press |
| record_format | dspace |
| spelling | upm.eprints-283752015-09-21T02:36:36Z http://psasir.upm.edu.my/id/eprint/28375/ Earnings response coefficient of banking shares: a multi-country study with control for risk Syed Mohamed, Mohamed Ariff Cheng, Fan Fah This paper reports new finding on earnings response coefficients of banking firms on how information disclosed regarding (i) total earnings and (ii) fee earnings is associated with share price changes around the time of financial report releases. This paper extends to banking firms a widely used analysis of earnings response studies on non-banking firms. To obtain robust test results, we extended this common model, for the first time, by adding control variables and also by applying panel regression. Changes in total earnings do influence share prices significantly in the four countries studied i.e. Malaysia, Thailand, South Korea and Australia. Australian investors appear to use disclosed information on fee income also to revise share prices significantly as being value relevant. Investors regard both total and fee incomes as equally important in Australia whereas investor actions in the other three markets studied lead to weak evidence on fee income effect. This paper reports new findings on value relevance of disclosures extended to banking firms. Universiti Putra Malaysia Press 2013-10 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/28375/1/28375.pdf Syed Mohamed, Mohamed Ariff and Cheng, Fan Fah (2013) Earnings response coefficient of banking shares: a multi-country study with control for risk. Pertanika Journal of Social Sciences & Humanities, 21 (spec. Oct.). pp. 31-56. ISSN 0128-7702; ESSN: 2231-8534 http://www.pertanika.upm.edu.my/Pertanika%20PAPERS/JSSH%20Vol.%2021%20%28S%29%20Oct.%202013/03%20Page%2031-56.pdf |
| spellingShingle | Syed Mohamed, Mohamed Ariff Cheng, Fan Fah Earnings response coefficient of banking shares: a multi-country study with control for risk |
| title | Earnings response coefficient of banking shares: a multi-country study with control for risk |
| title_full | Earnings response coefficient of banking shares: a multi-country study with control for risk |
| title_fullStr | Earnings response coefficient of banking shares: a multi-country study with control for risk |
| title_full_unstemmed | Earnings response coefficient of banking shares: a multi-country study with control for risk |
| title_short | Earnings response coefficient of banking shares: a multi-country study with control for risk |
| title_sort | earnings response coefficient of banking shares a multi country study with control for risk |
| url | http://psasir.upm.edu.my/id/eprint/28375/1/28375.pdf |
| work_keys_str_mv | AT syedmohamedmohamedariff earningsresponsecoefficientofbankingsharesamulticountrystudywithcontrolforrisk AT chengfanfah earningsresponsecoefficientofbankingsharesamulticountrystudywithcontrolforrisk |