Search results for " earnings"
showing 10 items of 21 documents
Evaluating the Interrelationship between Actions of Latvian Commercial Banks and Latvian Economic Growth
2017
Abstract This paper aims to evaluate the existence of the interrelationship between Latvian commercial banks’ operations on the economy, based on economic theory and the analysis of banks’ retained earnings, credit growth and economic growth trends. The existence of this interrelationship was tested using Granger causality and Johansen co integration tests. The analysis was based on quarterly data from 2001 to 2015. The study reviewed several indicators for banking developments to establish their relevance for GDP growth: credit to non-banks, non-bank deposits and bank retained earnings. This paper finds that the empirical link between bank retained earnings and GDP growth is more robust th…
Sustainable Growth Rate: An Analysis Regarding the Most Traded Companies on the Bucharest Stock Exchange
2018
The concept of sustainable growth rate was originally developed by Robert C. Higgins. In the case of companies with given stable financial policies, it is considered to be the link between growth-return rate combinations that gives a balanced growth line. This indicates the possibilities for a company to grow without generating deficits or cash surpluses. Increased sales require more assets, which can be financed by new debt, external equity, and internal equity through retained earnings. The sustainable growth rate is the maximum rate at which company sales can increase without decreasing its financial resources. The aim of this paper is to determine if the last year most traded companies …
The value relevance of losses revisited: the importance of earnings aggregation
2011
Accepted version of an article published in the journal: Global Business and Economics Review. Also available from the publisher at: http://dx.doi.org/10.1504/GBER.2011.040728 Prior research has suggested that earnings explain a larger portion of the variation in stock returns when disaggregated into components. This study shows that the increase in explanatory power stems primarily from disaggregation of negative earnings. When accounting earnings are sufficiently disaggregated into items, there is no longer a statistical difference in the value relevance of positive and negative earnings. Thus, negative earnings are also useful to stock investors. The findings are attributed to earnings p…
Predicting failure in the U.S. banking sector: An extreme gradient boosting approach
2019
Abstract Banks play a central role in developed economies. Consequently, systemic banking crises destabilize financial markets and hamper global economic growth. In this study, extreme gradient boosting was used to predict bank failure in the U.S. banking sector. Key variables were identified to anticipate and prevent bank defaults. The data, which spanned the period 2001 to 2015, consisted of annual series of 30 financial ratios for 156 U.S. national commercial banks. Identifying leading indicators of bank failure is vital to help regulators and bank managers act swiftly before distressed financial institutions reach the point of no return. The findings indicate that lower values for retai…
The effect of job displacement on couples' fertility decisions
2016
This paper analyzes the effects of job displacement on fertility using Finnish longitudinal employer-employee data (FLEED) matched to birth records. We distinguish between male and female job losses. We focus on couples where one spouse has lost his/her job due to a plant closure or mass layoff and follow them for several years both before and following the job loss. As a comparison group we use similar couples that were not affected by job displacement. In order to examine the possible channels through which job loss affects fertility we examine also the effect on earnings, employment and divorce. The results show that a woman?s own job loss decreases fertility mainly for highly educated w…
Current account adjustment and retained earnings
2019
First published online: 04 March 2019 This paper develops a formal strategy to calculate current accounts with retained earnings ( RE) on equity investment and analyzes their adjustment during the global financial crisis. RE are the part of companies' profits which is reinvested and not distributed to shareholders as dividends. International statistical standards treat RE on foreign direct investment and RE on portfolio investment differently: while the former enter the current and financial account, the latter do not. We show that this differential treatment strongly affects current accounts of several advanced economies, frequently referred to as financial centers, with large positions in…
Audit fees and earnings management: differences based on the type of audit
2020
In spite of the extensive research about the impact of audit fees on audit quality, there is no research examining if the association between voluntary audits and audit pricing affects audit quality. Therefore, the aim of this paper is to empirically examine whether the effect of audit fees on audit quality, measured by the level of earnings management, is affected by the type of audit (voluntary vs mandatory), as well as whether the effect of audit fees on audit quality is different depending on the type of audit. Using a sample of Spanish SMEs composed of both voluntarily and mandatorily audited companies, we find that voluntary audits have higher quality when audit fees are lower, but th…
Conservatism and Accounting Earnings
2015
The article refers to accounting conservatism and its relation with accounting earnings. After providing the conceptual background of the prudence concept, which is the basis of accounting conservatism, the paper introduces some more empirically testable concepts, known as conditional and unconditional conservatism. It also explains the economics behind this accounting practice, mainly associated to contracting due to the asymmetric information between managers and external stakeholders, but also linked to litigation risks, taxation, political and regulatory processes. After providing a brief explanation of the empirical measures of conservatism, it gives a summary of the vast empirical res…
Does Commuting Reduce Wage Disparities?
2004
ABSTRACT This paper shows that in the Baltic countries, commuting reduces urban-rural wage and employment disparities and increases national output. To quantify the effect of commuting on wage differentials, two sets of earnings functions are estimated (based on Estonian, Latvian, and Lithuanian Labor Force Surveys) with location variables (capital city, rural, etc.) measured at the workplace and at the place of residence. We find that the ceteris paribus wage gap between capital city and rural areas, as well as between capital and other cities is significantly narrowed by commuting in some cases but remains almost unchanged in others. Different outcomes are explained by country-specific s…
Biomarkers and Long-Term Labour Market Outcomes: The Case of Creatine
2014
I evaluate the impact of the UK Working Time Regulations 1998, which introduced mandatory paid holiday entitlement. The regulation gave (nearly) all workers the right to a minimum of 4 weeks of paid holiday per a year. With constant weekly pay this change amounts effectively to an increase in the real hourly wage of about 8.5% for someone going from 0 to 4 weeks paid holiday per year, which should lead to adjustments in employment. For employees I use complementary log-log regression to account for right-censoring of employment spells. I find no increase in the hazard to exit employment within a year after treatment. Adjustments in wages cannot explain this result as they are increasing for…