A comparison of earnings persistence in high-tech and non-high-tech firms

Sung Kwon () and Jennifer Yin ()

Review of Quantitative Finance and Accounting, 2015, vol. 44, issue 4, 645-668

Abstract: This paper examines systematic differences in earnings persistence between high-tech (HT) and non-high-tech (NHT) firms in the presence of economic- and accounting-driven factors. We document that (1) HT firms, relative to NHT firms, show lower levels of earnings persistence, even after economic and accounting factors identified in prior research are controlled; (2) the type of HT products (durables) increases earnings persistence; and (3) the association between earnings persistence and discretionary accruals is higher in HT firms, possibly because HT mangers use discretionary accruals to convey private information about future cash flows. Copyright Springer Science+Business Media New York 2015

Keywords: Earnings persistence; Earnings management; Conservatism; High-tech firms; M41; L70; G10 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:kap:rqfnac:v:44:y:2015:i:4:p:645-668

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DOI: 10.1007/s11156-013-0421-5

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