This paper examines the relation between smooth past earnings performance and the credibility of voluntary management earnings forecasts. Specifically, using strings of increasing earnings per share as our measure of past performance, we demonstrate that both analyst forecast revisions and stock price reactions around management earnings forecasts are more pronounced when the firm has posted a ...

Earnings Instability and Earnings Inequality in Urban China: 1989–2006 This paper investigates the evolution of earnings inequality in urban China from 1989 to 2006. After decomposing the variance of log of earnings into transitory and permanent two parts, we find that both components are important contributors to the total variance of earnings. We also find that the share of the transitory par...

This study examines whether earnings changes convey information in bond markets and finds a significant positive (negative) reaction to unexpected earnings increases (decreases). The results are consistetit whether earnings announcements precede or follow dividend announcements. Thus, earnings surprises convey information to bond markets and changes in firm value are split among bondholders and...

Increases in the association between spouses' earnings have the potential to increase inequality as marriages increasingly consist of two high-earning or two low-earning partners. This article uses log-linear models and data from the March Current Population Survey to describe trends in the association between spouses' earnings and estimate their contribution to growing earnings inequality amon...

We investigate whether the positive associations between discretionary accrual proxies and beating earnings benchmarks hold for comparisons of groups segregated at other points in the distributions of earnings, earnings changes, and analystsbased unexpected earnings. We refer to these points as ‘‘pseudo’’ targets. Results suggest that the positive association between discretionary accruals and ...

In this paper, we present the results from a field experiment in the Netherlands in which single mothers on welfare were stimulated to find a job. Two policy instruments were introduced: an earnings disregard and job creation. The experiment was performed at the level of municipalities. In our analysis we make a distinction between native and immigrant welfare recipients. For immigrant single m...

We examine whether the previously documented pricing premium for firms’ equity when they meet or beat earnings expectations (MBE) is attributable to a reduction in the cost of equity capital via a reduction in information asymmetry. We measure the latter using the probability of informed trading (PIN) from Easley et al. (1997). We find that PIN decreases (increases) when firms meet or beat (mis...

This note examines trends in elective deferrals from 1990 through 2001. Elective deferrals of earnings―401(k)-type plans and similar arrangements for deferring income taxation of earnings placed in retirement accounts―first became common in the early 1980s and have grown in popularity since then. Trends in elective deferrals are potentially important in analyzing historical earnings data and in...

This study shows that analysts vary significantly in their responsiveness to earnings announcements, where responsiveness is defined as promptness of analysts’ first forecast revisions for the next quarter since the prior quarterly earnings announcements. Further evidence indicates that analysts’ responsiveness improves the efficiency of their expectations of future earnings immediately after t...