The Impact of Smoothing on Firm Value - An Industry Analysis
(2011)Department of Business Administration
- Abstract
- The purpose of this study is to analyze the impact of smoothing on firm value in the US Electricity, Oil & Gas Producers, Pharma & Biotechnology, Retail and Leisure & Tourism Industry. We find that investors value smooth earnings in the Oil & Gas, Electricity & Alternative Energy and Leisure & Tourism Industry. In the Pharma & Biotechnology and Retail industry we do not find smoothing activity to be value relevant. Over the majority of industries we observe time- specific effects. The findings of our empirical analysis show that benefits from smoothing cannot be generalized across industries. Instead the value relevance of smoothing income/earnings has three dimensions which need to be analyzed in order to find meaningful results. This is... (More)
- The purpose of this study is to analyze the impact of smoothing on firm value in the US Electricity, Oil & Gas Producers, Pharma & Biotechnology, Retail and Leisure & Tourism Industry. We find that investors value smooth earnings in the Oil & Gas, Electricity & Alternative Energy and Leisure & Tourism Industry. In the Pharma & Biotechnology and Retail industry we do not find smoothing activity to be value relevant. Over the majority of industries we observe time- specific effects. The findings of our empirical analysis show that benefits from smoothing cannot be generalized across industries. Instead the value relevance of smoothing income/earnings has three dimensions which need to be analyzed in order to find meaningful results. This is the firm, industry and time dimension. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/2058258
- author
- Struck, Henriette and Fiehn, Sara
- supervisor
- organization
- year
- 2011
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Management of enterprises, industry analysis, value premium, income smoothing, earnings management, risk management, cash-flow smoothing, Företagsledning, management
- language
- Swedish
- id
- 2058258
- date added to LUP
- 2011-06-01 00:00:00
- date last changed
- 2012-11-12 11:21:53
@misc{2058258, abstract = {{The purpose of this study is to analyze the impact of smoothing on firm value in the US Electricity, Oil & Gas Producers, Pharma & Biotechnology, Retail and Leisure & Tourism Industry. We find that investors value smooth earnings in the Oil & Gas, Electricity & Alternative Energy and Leisure & Tourism Industry. In the Pharma & Biotechnology and Retail industry we do not find smoothing activity to be value relevant. Over the majority of industries we observe time- specific effects. The findings of our empirical analysis show that benefits from smoothing cannot be generalized across industries. Instead the value relevance of smoothing income/earnings has three dimensions which need to be analyzed in order to find meaningful results. This is the firm, industry and time dimension.}}, author = {{Struck, Henriette and Fiehn, Sara}}, language = {{swe}}, note = {{Student Paper}}, title = {{The Impact of Smoothing on Firm Value - An Industry Analysis}}, year = {{2011}}, }