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The Timeliness of Income Recognition by European Companies: An Analysis of Institutional and Market Complexity

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Author Info
Ivana Raonic
Stuart McLeay
Ioannis Asimakopoulos

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Abstract

This study examines international differences in the asymmetric timeliness of accounting earnings by modelling international exposure to different jurisdictions as a firm-specific effect, using an index of regulatory complexity that relates to conditions in each of the capital markets in which the firm's equity is listed. The companies investigated are those with shares cross-listed on European stock exchanges, some of which are also listed in New York. Variation across jurisdictions and markets with respect to earnings timeliness and conservatism can be explained in part as an interaction of market effects and regulatory effects, with some evidence of opposition between the two, and the sensitivity of earnings to stock price changes shows a common, converging trend towards greater accounting conservatism in Europe. Copyright Blackwell Publishers Ltd, 2004.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.0306-686X.2004.00004.x
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Article provided by Blackwell Publishing in its journal Journal of Business Finance & Accounting.

Volume (Year): 31 (2004-01)
Issue (Month): 1-2 ()
Pages: 115-148
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Handle: RePEc:bla:jbfnac:v:31:y:2004-01:i:1-2:p:115-148

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  1. Juan Manuel GarcĂ­a Lara & Araceli Mora, 2004. "Balance sheet versus earnings conservatism in Europe," European Accounting Review, Taylor and Francis Journals, vol. 13(2), pages 261-292, July. [Downloadable!] (restricted)
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