Asymmetric recognition of good and bad news at Malaysian capital market : a pre and crisis analysis

Ali Ahmed, Huson Joher 2007, Asymmetric recognition of good and bad news at Malaysian capital market : a pre and crisis analysis, The European journal of economics, finance and administrative sciences, vol. 9, pp. 15-20.

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Title Asymmetric recognition of good and bad news at Malaysian capital market : a pre and crisis analysis
Author(s) Ali Ahmed, Huson Joher
Journal name The European journal of economics, finance and administrative sciences
Volume number 9
Start page 15
End page 20
Total pages 6
Publisher European Journals, Inc.
Place of publication Vienna, Austria
Publication date 2007
ISSN 1450-2275
Summary The aim of this paper is to analyze the asymmetric recognition of good and bad news on reported earnings of Malaysian-listed firms. The study uses both descriptive and regression analyses to ascertain whether there is a contemporaneous relationship between news (good and bad) and reported earnings. The analysis is based on a sample of 150 firms listed on the Bursa Malaysia Index over a period of 10 years, from 1990 to 2000. Two regression models were adopted based on Basu (1997) and Giner and Rees (2001). The first model aims to capture asymmetric recognition of good and bad news into reported earnings while the latter model is developed to capture both asymmetric recognition of information shock and permanent earnings effect on contemporaneous earnings. The evidence from this study reported the steady increase in earnings per share till 1997. However, a drastic decline was observed for the period 1997 to 1999 because of Asian financial crisis. The findings from the regression model one suggested that the asymmetric recognition of good news was more prominent during the good time compare to bad time and vice versa. The findings from model two also suggested that autoregressive effect of permanent effect was very prominent both for crisis and non crisis periods.
Language eng
Field of Research 150203 Financial Institutions (incl Banking)
HERDC Research category C1.1 Refereed article in a scholarly journal
Persistent URL http://hdl.handle.net/10536/DRO/DU:30024335

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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