Accounting earnings response coefficient: An extension to banking shares in Asia Pacific countries

Mohamed Ariff, Fan Fah Cheng

Research output: Contribution to journalArticleResearchpeer-review

4 Citations (Scopus)

Abstract

This paper reports new finding on earnings response coefficients for banking firms on how disclosures on total earnings and disaggregated fee earnings are used by investors to change share prices prior to earnings disclosures. The information relating to total earnings influences share prices significantly in all four banking sectors studied, all of which have sufficiently liberalized capital markets. Australian investors appear to use information on disaggregated non-interest fee income to revise share prices significantly: not so in other markets. The investors in Malaysia and South Korea appear to consider changes in fee income as bad news with negative price impact, anomalous to theory. The Australian investors appear to regard both total and fee incomes as equally important whereas investors in other markets either ignore or consider changes in fee income as bad news for share valuation. This study extends the literature on this topic from non-bank to banking firms.

Original languageEnglish
Pages (from-to)346-354
Number of pages9
JournalAdvances in Accounting
Volume27
Issue number2
DOIs
Publication statusPublished - Dec 2011

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Fees
Investors
Banking
Accounting earnings
Asia-Pacific
Earnings response coefficients
Income
Share prices
News
Disclosure
Price impact
Capital markets
Information use
South Korea
Banking sector
Malaysia

Cite this

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Accounting earnings response coefficient : An extension to banking shares in Asia Pacific countries. / Ariff, Mohamed; Cheng, Fan Fah.

In: Advances in Accounting, Vol. 27, No. 2, 12.2011, p. 346-354.

Research output: Contribution to journalArticleResearchpeer-review

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