scholarly journals Earnings Predictability of Quoted Firms in Nigeria

2020 ◽  
Vol 2 (1) ◽  
pp. 23-32
Author(s):  
Taiwo Azeez Olaniyi ◽  
Segun Abogun ◽  
Mudathir Olanrewaju Salam
Keyword(s):  
Secondary Data ◽  
Financial Statements ◽  
Method Of Moment ◽  
Future Earnings ◽  
Earnings Information ◽  
Dynamic Panel Regression ◽  
Earnings Predictability ◽  
Reported Earnings ◽  
Generalized Method Of Moment ◽  
The Impact

The inability of investors to predict future earnings of firms exposes them to further risk such that potential investors may be scared away while existing ones may be prompted to withdraw their investment. Thus, it becomes imperative to evaluate the earnings predictability of Nigerian quoted firms with a view to establish the ability or inability of earnings to predict itself. Also, the study examined the impact of volatility on earnings predictability of Nigerian quoted firms. The total number of seventy three (73) quoted Nigerian firms constitutes the population of this study and the entire 73 firms were studied. The causal relationship research design was adopted. The secondary data used were collected from the financial statements of the quoted firms for the period 1996 to 2015. The system generalized method of moment (GMM) was used to estimate the dynamic panel regression models of the study. The study found that earnings of firms are predictable. The study also found that volatility has adverse effect on earnings predictability. It was therefore recommended more interest/investment in Nigerian firms since earnings information is available and is predictable while managements of firms should reduce instability in reported earnings.  

scholarly journals Impact of Capital Regulation and Market Discipline on Capital Ratio Selection: A Cross Country Study

2020 ◽  
Vol 8 (2) ◽  
pp. 21 ◽  
Author(s):  
Ahmed Imran Hunjra ◽  
Qasim Zureigat ◽  
Rashid Mehmood
Keyword(s):  
Developing Countries ◽  
Financial Statements ◽  
The Philippines ◽  
Market Discipline ◽  
Capital Regulation ◽  
Method Of Moment ◽  
Cross Country ◽  
Generalized Method Of Moment ◽  
The Impact ◽  
Asian Developing Countries

We aim to analyze the impact of capital regulation and market discipline on capital to risk-weighted assets ratio. We used the panel data of Asian developing-countries banks for the period from 2009 to 2018. We collected data from the financial statements of 73 banks of Pakistan, Jordan, Indonesia, the Philippines, Saudi Arabia, and Thailand. We used the generalized method of moment (GMM) to analyze the results. We find that capital regulation and market disciplines significantly influence the capital ratio in Asian developing countries.

The impact of foreign direct investment on trade in Pakistan: the moderating role of terrorism

2020 ◽  
Vol 47 (5) ◽  
pp. 1137-1154
Author(s):  
Syed Hasanat Shah ◽  
Hafsa Hasnat ◽  
Delpachitra Sarath
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Deficit ◽  
Method Of Moment ◽  
Content Type ◽  
The Face ◽  
External Sector ◽  
Generalized Method Of Moment ◽  
The Impact

PurposePakistan suffered with the menace of terrorism for long and become a front line state in the “War on Terror”. Terrorism shattered Pakistan economy and rendered her external sector vulnerable to instability and uncertainties.Design/methodology/approachTherefore, using system generalized method of moment (GMM), this paper investigates the impact of foreign direct investment (FDI) on exports, imports and trade deficit in the face of unabated terrorism in Pakistan.FindingsThe findings of the paper suggest that as terrorism in Pakistan increased, FDI contribution to Pakistan exports decreased while FDI contribution to Pakistan imports significantly increased. Terrorism also disrupted the chain of local production and increased Pakistan reliance on imports. Thus terrorism widened Pakistan trade deficit of Pakistan and expose Pakistan to external imbalances.Originality/valueDespite rise in organized acts of terrorism and its adverse impact on various departments of economy, hardly any study bothers to check its impact on trade and investment nexus. This is the first study of its nature that looks deep down to understand how terrorism affects the relation of major economic variables.

scholarly journals Impact of Agency Costs on Firm Performance: Evidence from Vietnam

2019 ◽  
Vol 10 (2) ◽  
pp. 294-309
Author(s):  
Le Duc Hoang ◽  
Tran Minh Tuan ◽  
Pham Van Tue Nha ◽  
Pham Van Tue Nha ◽  
Ta Thu Phuong
Keyword(s):  
Firm Performance ◽  
Instrumental Variables ◽  
Agency Costs ◽  
Negative Impact ◽  
Listed Companies ◽  
Econometric Models ◽  
Method Of Moment ◽  
Generalized Method Of Moment ◽  
The Impact

An assumption in agency costs theory is that agency costs can exert a negative impact on firm performance. In this study, we examine the impact of agency costs on firm performance of Vietnamese listed companies. Our sample includes 736 companies in Vietnam during the period om 2010 to 2015. We find that agency costs exert a negative impact on firm performance. Our results are robust to alternative econometric models, including an instrumental variables technique and a system generalized method of moment model. In addition, we show that a debt instrument can be a useful tool to reduce the negative impact of agency costs on firm performance.

scholarly journals Malaria and Natural Disasters: Evidence Using GMM Approach

2020 ◽  
Vol 21 (2) ◽  
pp. 703-716
Author(s):  
Harpaljit Kaur ◽  
Muzafar Shah Habibullah ◽  
Shalini Nagaratnam
Keyword(s):  
Natural Disasters ◽  
Capital Accumulation ◽  
Health Conditions ◽  
Human Capital Accumulation ◽  
Clean Water ◽  
Method Of Moment ◽  
Two Measures ◽  
Generalized Method Of Moment ◽  
The Impact ◽  
Robustness Check

Natural disasters not only disrupt accessibility to education, health care, food supplies and clean water, but causes outbreak of diseases. These issues deteriorate the health conditions among the victims of disasters and reduce human capital accumulation that adversely affects the economic development of the country. This paper examines the impact of total disasters and floods on malaria incidences using panel data over the period 2008 to 2014 for 79 countries. For robustness check, we use two measures on each of these natural disasters; the number of occurrences and number of people affected by these disasters. Employing the system Generalized Method of Moment (GMM) model, the findings show that the occurrences and the number of people affected by total disasters and flood, significantly increases cases of malaria. Income and education negatively impact the incidences of malaria whereas urbanization and deforestation increase the rates of malaria cases.

scholarly journals Audit Fees and Financial Performance of Deposit Taking Saccos in North RIFT, Kenya

2020 ◽  
Vol 6 (5) ◽  
pp. 15-27
Author(s):  
Dorris Serem ◽  
Dr. Rashid Fwamba ◽  
Dr. Alala Benedict
Keyword(s):  
Financial Performance ◽  
Audit Quality ◽  
Secondary Data ◽  
Financial Statements ◽  
Audit Fees ◽  
Positive Influence ◽  
Auditor Independence ◽  
Audit Firm ◽  
Firm Experience ◽  
The Impact

The collapse of Deposit-Taking SACCOS and financial institutions in Kenya has caught the attention of the public and supervisory agencies to query the quality of audit. SACCO Societies Regulatory Authority on its inspection report indicated that SACCOs have been implicated in maladministration, scams and fraudulent dealings that led to their eventual collapse. SASRA also revoked licenses and rejected audited financial statements of some Deposit Taking SACCOs between 2013 to 2017.These financial scandals have been traced to poor audit quality. The study aimed to test the impact of audit quality on financial performance of Deposit-Taking SACCOs in North Rift Region, Kenya. The study sought to establish the influence of audit fees on financial performance; determine the influence of audit firm tenure on financial performance; establish the influence of auditor independence on financial performance and to determine the influence of audit firm experience on financial performance of Deposit-Taking SACCOs in North Rift Region, Kenya. This study was based on Agency theory, Role theory and the Concept of audit expectation gap, and Stakeholders’ theory. This research adopted descriptive cross-sectional research design. The target population for the study was 266 staff of all the 16 registered Deposit-Taking SACCOs in North Rift Region, Kenya. The sample size was 48 respondents comprising of chief executive officers, finance officers and internal auditors of the Deposit-Taking SACCOs selected using purposive sampling method. Primary and secondary data was used. Questionnaires collected primary data while audited annual financial statements of SACCOs provided secondary data. Inferential and descriptive statistics was used in analyzing data through SPSS version 25. It emerged that audit fees, audit firm tenure and audit firm experience have a significant positive influence on financial performance of Deposit-Taking SACCOs in North Rift Region, Kenya. Auditor independence had an insignificant positive influence on financial performance of Deposit-Taking SACCOs in North Rift Region, Kenya. The study concluded that audit quality has a positive noteworthy impact on financial performance of Deposit-Taking SACCOs in Kenya. The study recommends that regulatory authorities should formulate strict rules on audit fee charges and oversee the implementation of the same. Also, SASRA should ensure DT-SACCOs implement auditor rotation in compliance with auditing regulations and standards. DT-SACCOs to consider auditor’s professional competence and experience before initiating any audit engagement. Finally, DT-SACCOs and auditors should reinforce the professional code of ethics in regard to auditor independence in terms of familiarity between auditor and the client that may lead audit work into jeopardy.

scholarly journals THE IMPACT OF FINANCIAL STATEMENT ANALYSIS ON THE PROFITABILITY ASSESSMENT (APPLIED STUDY OF KIRKUK COMPANY FOR PRODUCING CONSTRUCTIONAL MATERIALS)

2018 ◽  
Author(s):  
Amanj Mohamed Ahmed
Keyword(s):  
Secondary Data ◽  
Financial Statements ◽  
Financial Statement ◽  
Financial Statement Analysis ◽  
Balance Sheets ◽  
The Past ◽  
Applied Study ◽  
Research Goal ◽  
The Impact ◽  
Profitability Assessment

The present study entitled “financial statement analysis and assessing the profitability of the Kirkuk’s Company for producing constructional materials”. The main goal of the accounting department in the firms is to prepare the reliable financial statements in order to make their valid balance sheets, income statements and cash flow statement. This paper determines the confirming effects of the financial statement analysis to assess the profitability of the Kirkuk Company. The data in this study is based on the secondary data and it collected from the past and present performance of Kirkuk’s Company for producing constructional materials. To achieve the research goal, four categories of the financial ratios were utilized for testing the study’s hypothesis. This group of ratios was applied to assess the financial situation of the company in the years between “2005 to 2011” by using different techniques of financial statement analysis. The results clearly show that, there are insignificant relationships between profitability with asset regulated and assets utilization. At the same times, there is a weak relationship between profitability and liquidity.

scholarly journals Effect of Trade Credit on Firms Growth: A Case Study of Pakistani Non-financial Firms

2019 ◽  
Vol 5 (2) ◽  
Author(s):  
Hafiz M. Adnan Hanif
Keyword(s):  
Panel Data ◽  
Firm Growth ◽  
Trade Credit ◽  
Panel Data Analysis ◽  
Method Of Moment ◽  
Listed Firms ◽  
Financial Firms ◽  
Generalized Method Of Moment ◽  
The Impact

This study attempts to investigate the impact of trade credit on the growth of non-financial firms of Pakistan. Most of the businesses move from traditional business transactions to automated and sophisticated credit transaction methods. As large firms have better access to financial institutions and markets but still, they are interested to seek firm growth by adopting the trade credit policies. This study collects information from non-financial firms of Pakistan. Panel data is used to explore the impact of trade credit on firms growth. The data collect from the year 2001- 2015 of 257 non-financial firms of Pakistan. A technique of panel data analysis, generalized method of moment used to analyze the data. The results suggest that the trade credit and GDP have a positive significant impact on firms’ growth. Moreover, Firm’s age, its size and inflation in the economy have also impacted the firm’s growth but in negative direction. Finally, the non-financial listed firms of Pakistan can achieve their growth targets by adopting trade credit policies

scholarly journals The Impact of Financial Development on Corporate Performance: Theory and Evidence

2020 ◽  
Vol 12 (1) ◽  
pp. 214
Author(s):  
Thu-Trang Thi Doan ◽  
Toan Ngoc Bui
Keyword(s):  
Stock Market ◽  
Financial Development ◽  
Essential Role ◽  
Corporate Performance ◽  
Banking System ◽  
Performance Theory ◽  
Method Of Moment ◽  
Parallel Development ◽  
Generalized Method Of Moment ◽  
The Impact

This paper investigates the impact of financial development on corporate performance. Particularly, financial development is approximated by the parallel development of the banking system and stock market, which is expected to demonstrate the multidimensional nature in financial development. Specially, we consider the influence of financial development on corporate performance by exploring the theoretical and empirical works, a novel way of approaching the problem. We analyse the data of logistics sector and financial development in Vietnam, an economy whose logistics sector is relatively limited and financial development is quite fledging, but has enormous potential. Therefore, this study is expected to identify a number of unprecedented findings. The Generalized Method of Moment (GMM) is chosen for the analysis to ensure the reliable results. We successfully find that the banking system plays an essential role in enhancing corporate performance while the stock market does not perform this role. Admittedly, this is an interesting finding which brings the novelty of this study.

PERBANDINGAN TINGKAT KEAKURATAN MODEL LABA PERMANEN, LABA TRANSITORI DAN LABA AGREGAT DALAM MEMPREDIKSI LABA MASA DEPAN (Studi Empiris pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Jakarta)

2008 ◽  
Author(s):  
Matthew Jeffalino ◽  
Yunilma Yunilma
Keyword(s):  
Time Series ◽  
Sensitivity Analysis ◽  
Cash Flow ◽  
Financial Statements ◽  
Exponential Smoothing ◽  
Future Earnings ◽  
Aggregate Earnings ◽  
Reported Earnings ◽  
Core Activity ◽  
Naive Model

Earnings represent information which very paid attention by users of financial statements. Some research was examined the ability of earnings to forecast future earnings which only focused to aggregate earnings. Some literature mention that reported earnings number contain permanent and transitory earnings component which can be used to forecast future earnings and future cash flow. Permanent earnings is earnings related to core activity of the firms which always happened each every period. while transitory earnings are earnings do not relate with core activity of the firms and is not expected to happened in next period. This research empirically examines the level of accuracy model with permanent, transitory, and aggregate earnings component to forecast future earnings of the firms. This research also use naive model as benchmark compared with permanent, transitory, and aggregate earnings to forecast future earnings. By using 60 observations by time-series from 2000-2006. the result of research indicate that model with permanent earnings component more accurate compared model with transitory, aggregate earnings component, and naive model to forecast future earnings. This research also use exponential smoothing model as benchmark in sensitivity analysis. The result demonstrate that model with permanent earnings component more accurate compared model with transitory, aggregate earnings component, naive model, and exponential smoothing model to forecast future earnings.

Disclosures of Insider Purchases and the Valuation Implications of Past Earnings Signals

2011 ◽  
Vol 87 (1) ◽  
pp. 313-342 ◽  
Author(s):  
David Veenman
Keyword(s):  
Firm Value ◽  
Securities And Exchange Commission ◽  
Data Availability ◽  
Information Uncertainty ◽  
Market Reactions ◽  
Future Earnings ◽  
Earnings Information ◽  
Reported Earnings

ABSTRACT This study examines whether disclosures of insider equity purchases on Securities and Exchange Commission (SEC) Form 4 resolve uncertainty regarding the valuation implications of reported earnings. Defining information uncertainty as ambiguity about firm value arising from low earnings precision, I predict and find that insider purchase filings trigger more positive market reactions in firms with greater information uncertainty (lower quality accruals). After controlling for future earnings changes, I further find that market reactions to purchase filings are predictably associated with prior earnings changes. The strength of this effect is increasing in the magnitude of insider purchases, as well as the level of information uncertainty. Overall, these findings suggest that, in addition to signaling future earnings information, Form 4 purchase filings help investors learn about the valuation implications of past earnings signals. Data Availability: All data are available from public sources.

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