Estimating earnings response coefficients: pooled versus firm-specific models

Article Abstract:

Short-window accounting capital market studies are examined with specific focus on their use of firm-specific versus pooled cross-sectional regressions to estimate earnings response coefficients. Findings show that the mean of the firm-specific coefficients is systematically larger, about 13 times larger on average, than short-window earnings response coefficients estimated from pooled cross-sectional regressions. The discrepancy can be attributed to differences in coefficients, firm-specific variances in unexpected earnings (UE), and the negative relationship between firm-specific UE variances and earnings response coefficients.

Models, Return on investment, Regression analysis, Rate of return

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Global organizations and taxes: an analysis of the dividend, interest, royalty, and management fee payments between U.S. multinationals' foreign affiliates

Article Abstract:

An examination of the tax return information of the foreign affliates of US multinational corporations showed that dividend, royalty and even interest payments are negatively correlated with the net tax applied on cross-border transfers. This is due to the control exercised by the parent firm on the timing and magnitude of returns to capital payments and the implications of foreign tax policies on capital payments. Many US multinationals time their activities to mitigate the effects of foreign tax policies on their cash flow.

Public Finance Activities, Multinational Corporations, Corporate Tax Rates, Taxation, Economic aspects, Corporate taxes, Corporations, Tax rates

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A test of the market's mispricing of domestic and foreign earnings

Article Abstract:

Results of a study investigating if abnormal returns can be earned using public information relating to the domestic and foreign earnings of firms, suggest that the market understates foreign earnings' persistence.

Management

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