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Earnings response coefficient of banking shares: a multi-country study with control for risk

This paper reports new finding on earnings response coefficients of banking firms on how information disclosed regarding (i) total earnings and (ii) fee earnings is associated with share price changes around the time of financial report releases. This paper extends to banking firms a widely used ana...

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Main Authors: Syed Mohamed, Mohamed Ariff, Cheng, Fan Fah
Format: Article
Language:English
Published: Universiti Putra Malaysia Press 2013
Online Access:http://psasir.upm.edu.my/id/eprint/28375/1/28375.pdf
http://psasir.upm.edu.my/id/eprint/28375/
http://www.pertanika.upm.edu.my/Pertanika%20PAPERS/JSSH%20Vol.%2021%20%28S%29%20Oct.%202013/03%20Page%2031-56.pdf
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spelling my.upm.eprints.283752015-09-21T02:36:36Z http://psasir.upm.edu.my/id/eprint/28375/ Earnings response coefficient of banking shares: a multi-country study with control for risk Syed Mohamed, Mohamed Ariff Cheng, Fan Fah This paper reports new finding on earnings response coefficients of banking firms on how information disclosed regarding (i) total earnings and (ii) fee earnings is associated with share price changes around the time of financial report releases. This paper extends to banking firms a widely used analysis of earnings response studies on non-banking firms. To obtain robust test results, we extended this common model, for the first time, by adding control variables and also by applying panel regression. Changes in total earnings do influence share prices significantly in the four countries studied i.e. Malaysia, Thailand, South Korea and Australia. Australian investors appear to use disclosed information on fee income also to revise share prices significantly as being value relevant. Investors regard both total and fee incomes as equally important in Australia whereas investor actions in the other three markets studied lead to weak evidence on fee income effect. This paper reports new findings on value relevance of disclosures extended to banking firms. Universiti Putra Malaysia Press 2013-10 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/28375/1/28375.pdf Syed Mohamed, Mohamed Ariff and Cheng, Fan Fah (2013) Earnings response coefficient of banking shares: a multi-country study with control for risk. Pertanika Journal of Social Sciences & Humanities, 21 (spec. Oct.). pp. 31-56. ISSN 0128-7702; ESSN: 2231-8534 http://www.pertanika.upm.edu.my/Pertanika%20PAPERS/JSSH%20Vol.%2021%20%28S%29%20Oct.%202013/03%20Page%2031-56.pdf
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description This paper reports new finding on earnings response coefficients of banking firms on how information disclosed regarding (i) total earnings and (ii) fee earnings is associated with share price changes around the time of financial report releases. This paper extends to banking firms a widely used analysis of earnings response studies on non-banking firms. To obtain robust test results, we extended this common model, for the first time, by adding control variables and also by applying panel regression. Changes in total earnings do influence share prices significantly in the four countries studied i.e. Malaysia, Thailand, South Korea and Australia. Australian investors appear to use disclosed information on fee income also to revise share prices significantly as being value relevant. Investors regard both total and fee incomes as equally important in Australia whereas investor actions in the other three markets studied lead to weak evidence on fee income effect. This paper reports new findings on value relevance of disclosures extended to banking firms.
format Article
author Syed Mohamed, Mohamed Ariff
Cheng, Fan Fah
spellingShingle Syed Mohamed, Mohamed Ariff
Cheng, Fan Fah
Earnings response coefficient of banking shares: a multi-country study with control for risk
author_facet Syed Mohamed, Mohamed Ariff
Cheng, Fan Fah
author_sort Syed Mohamed, Mohamed Ariff
title Earnings response coefficient of banking shares: a multi-country study with control for risk
title_short Earnings response coefficient of banking shares: a multi-country study with control for risk
title_full Earnings response coefficient of banking shares: a multi-country study with control for risk
title_fullStr Earnings response coefficient of banking shares: a multi-country study with control for risk
title_full_unstemmed Earnings response coefficient of banking shares: a multi-country study with control for risk
title_sort earnings response coefficient of banking shares: a multi-country study with control for risk
publisher Universiti Putra Malaysia Press
publishDate 2013
url http://psasir.upm.edu.my/id/eprint/28375/1/28375.pdf
http://psasir.upm.edu.my/id/eprint/28375/
http://www.pertanika.upm.edu.my/Pertanika%20PAPERS/JSSH%20Vol.%2021%20%28S%29%20Oct.%202013/03%20Page%2031-56.pdf
_version_ 1643829445779259392
score 13.211869

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