The role of low earnings in differing trends in male earnings volatility

The study examines the relationship between product mix and corporate governance on earnings volatility with the help of degree of total leverage (DTL) model. The present study attempts to fill the gap by investigating the relationship between product mix and corporate governance on earnings volatility for developing financial market during the period of 2005-2015. Earnings volatility is analysed by two proxies’ .i.e. revenue volatility and degree of total leverage. This study has used mainly two types of product mix that consists of lending and fee-based activities while board size, board independence and CEO power is used to measure corporate governance. The results of the study signify the adverse impact of fee-based activities on earnings volatility in the banking sector of Pakistan. Corporate governance confirms the board size and power of CEO in the board as contributing factors to control earnings volatility. The findings are useful to the bankers and regulators to comprehend the role of diversification and corporate governance in creating value and reducing risk for the stakeholders.

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Is China's P/E ratio too low? Examining the role of earnings volatility

Pacific-Basin Finance Journal ◽

10.1016/j.pacfin.2011.07.003 ◽

2012 ◽

Vol 20 (1) ◽

pp. 41-61 ◽

Cited By ~ 4

Author(s):

Alan G. Huang ◽

Tony S. Wirjanto

Keyword(s):

Earnings Volatility

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Does Franchising Alleviate Restaurants’ Vulnerability to Economic Conditions?

Journal of Hospitality & Tourism Research ◽

10.1177/1096348015619411 ◽

2015 ◽

Vol 42 (4) ◽

pp. 627-648 ◽

Cited By ~ 12

Author(s):

Yoon Koh ◽

Yinyoung Rhou ◽

Seoki Lee ◽

Manisha Singal

Keyword(s):

Management Strategy ◽

Restaurant Industry ◽

Economic Conditions ◽

Future Research ◽

Risk Management Strategy ◽

Publicly Traded ◽

Earnings Volatility ◽

Restaurant Firms ◽

High Degree

Although the implications of adopting a franchising strategy in the restaurant industry have been examined in previous literature, the role of franchising has mostly been viewed as a means of growth, without much attention paid to its role in reducing risk via alleviating earnings volatility. In this study, we examine whether, and to what extent, franchising in restaurant firms can reduce earnings volatility occurring due to fluctuating economic conditions. Our longitudinal analysis of publicly traded restaurant firms from 1994 to 2012 shows that, during changes in economic conditions, firms adopting a high degree of franchising face lower earnings volatility than firms that adopt a restricted degree of franchising. Our article contributes to the literature on restaurant franchising as a risk-management strategy while providing avenues for future research.

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Is China’s P/E Ratio Too Low? Examining the Role of Earnings Volatility

SSRN Electronic Journal ◽

10.2139/ssrn.1632667 ◽

2010 ◽

Cited By ~ 1

Author(s):

Tony S. Wirjanto ◽

Alan Guoming Huang

Keyword(s):

Earnings Volatility

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Financial Crises and Bank Earnings Volatility: The Role of Bank Size and Market Concentration

SSRN Electronic Journal ◽

10.2139/ssrn.1470727 ◽

2009 ◽

Cited By ~ 1

Author(s):

Choudhry Tanveer Shehzad ◽

Bert Scholtens ◽

Jakob de Haan

Keyword(s):

Financial Crises ◽

Market Concentration ◽

Earnings Volatility

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Effects of Derivatives on Bank Risk

Review of Pacific Basin Financial Markets and Policies ◽

10.1142/s0219091506000756 ◽

2006 ◽

Vol 09 (02) ◽

pp. 275-295 ◽

Cited By ~ 5

Author(s):

Dong-Hoon Yang ◽

Inman Song ◽

Junesuh Yi ◽

Young-Hyeon Yoon

Keyword(s):

Empirical Relationship ◽

Firm Risk ◽

Earnings Volatility ◽

Market Participants ◽

Alternative Measures ◽

Exogenous Factors ◽

Two Measures ◽

Reduce Risk ◽

Derivative Products

This study investigates the empirical relationship between the use of derivatives by Korean banks and risk. In doing so, we employ two alternative measures of proxy for firm risk: systematic risk and ex ante earnings volatility. Contrary to the general concerns about the risk-increasing role of the use of derivative products, our results indicate that banks' derivatives are, on average, associated with two measures of risk in negative ways. The evidence is consistent with the conjectures that derivative use reduces noise related to exogenous factors and hence decreases firm risk. This suggests that equity market participants, on average, perceive derivative activities by banks as a sign of banks' efforts to reduce risk.

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