Perception of negative earnings persistence and value relevance: Evidence from Zimbabwe
| dc.contributor.author | Sixpence, A. | |
| dc.contributor.author | Adeyeye, O.P. | |
| dc.date.accessioned | 2024-09-03T10:20:35Z | |
| dc.date.available | 2024-09-03T10:20:35Z | |
| dc.date.issued | 2018 | |
| dc.description.abstract | This paper investigates the impact of negative earnings persistence on the value relevance of earnings before interest and taxes (EBIT) and book values for 27 non-financial firms listed on the Zimbabwe Stock Exchange (ZSE). Negative earnings are perceived to be persistent where firms reported losses in at least 25% of the time over the eight-year study period. Two-step System GMM was used, with the average debt-equity ratio and net asset value per share being additional regression instruments. The regressions were primarily done on the ZSE full sample, and then on a profit-reporting firms’ sample. The loss-reporting firms’ sample was too small for meaningful regressions. It was found that when loss-firms were removed from the sample, value relevance of EBIT and book value declined. This means that investors are very meticulous with firms they perceive to be persistent loss-makers but tend to be complacent with profit-firms. | |
| dc.identifier.citation | Sixpence, A. and Adeyeye, O.P., 2018. Perception of negative earnings persistence and value relevance: Evidence from Zimbabwe. Cogent Economics & Finance, 6(1), p.1559711. | |
| dc.identifier.uri | http://196.220.97.103:4000/handle/123456789/352 | |
| dc.title | Perception of negative earnings persistence and value relevance: Evidence from Zimbabwe | |
| dc.type | Article |