Journal of Accounting and Economics Vol. 68 No. 2-3 2019
Modeling the determinants of meet-or-just-beat behavior in distribution discontinuity tests
Abstract
We develop new distribution discontinuity tests conditional on multiple explanatory variables for analyzing meet-or-just-beat behavior around benchmarks. These tests combine Burgstahler and Dichev's (1997) meet-or-just-beat intuition with a flexible statistical model that addresses important limitations of the existing tests. Our method considerably outperforms logit-based tests of distribution discontinuity determinants and changes the interpretation of a major finding in the earnings discontinuity literature. As a secondary benefit, it also has slightly higher statistical power than histogram-based tests of distribution discontinuity existence. Our method is robust, easy to implement using our publicly available Stata command, and could benefit researchers in many fields.
- DOI
- 10.1016/j.jacceco.2019.101266
- Volume
- 68
- Issue
- 2-3
- Pages
- 101266
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref