The purpose of this work is to provide the basic theoretical and a detailed review of the earnings response coefficient (ERC).
The earnings response coefficient measured using ordinary least squares with common intercepts increases from 0.
The effect of the default risk of debt on the earnings response coefficient.
The effects of backdating on earnings response coefficients.
2005 in the US, and Chen, Chen, and Su, 2001 in China) all regression results in Table 3 show that the earnings response coefficients (ERC), relating stock returns to the level and change in earnings, are positive and significant.
Jeter, 1992, "The Effect of Size on the Magnitude of Long-window Earnings Response Coefficients," Contemporary Accounting Research 8, 540-560.
Based on nonaudit fees from 1978-80, the evidence indicates that smaller earnings response coefficients
are associated with higher auditor provided nonaudit services.
Sloan, 1992, "Information in Prices About Future Earnings: Implications for Earnings Response Coefficients
," Journal of Accounting and Economics 15, 143-171.
Hypothesis: Earnings response coefficients
of designated firms are higher than those of non-designated firms.
J] is the earnings response coefficient
for firm i, and u is a random disturbance term assumed to be IID normal (0, [s.
This paper examines the relation between a firm's ownership structure and monitoring incentives for predisclosure information search/production, the timeliness of earnings release, and the relation between insider ownership and the earnings response coefficients
Teoh and Wong (1993) use audit firm size to proxy for auditor quality and earnings response coefficients
to measure the association between earnings and returns.