Journal of Accounting and Economics Vol. 5 1983
Some economic determinants of time-series properties of earnings
Abstract
The earnings ‘time-series literature’ in accounting focuses on the statistical characteristics of the processes which generate corporate earnings. In order to further our understanding of earnings behavior, this study investigates the question whether inter-firm differences in these statistical characteristics (autocorrelations and variances of earnings changes) can be explained by economic factors. Various relationships between economic factors and earnings behavior are derived from the economic literature and examined empirically in this study. Findings indicate that autocorrelations and variability of annual earnings and earnings over equity changes are systematically associated with the following factors: the type of product, the height of industry barriers-to-entry (a surrogate for degree of competition), the degree of capital intensity (‘operating leverage’), and the firm size.
- DOI
- 10.1016/0165-4101(83)90004-6
- Volume
- 5
- Pages
- 31-48
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref