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O papel da persistência dos lucros na acurácia de avaliação e no horizonte temporal

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  • Pimentel, Renê Coppe
  • Aguiar, Andson Braga de

Abstract

Based on the assumption that earnings persistence has implications for both financial analysis and compensation contracts, the aim of this paper is to investigate the role of earnings persistence assuming that (i) more persistent earnings are likely to be a better input to valuation models and (ii) more persistent earnings are likely to serve as a proxy for long-term market and managerial orientation. The analysis is based on Brazilian listed firms from 1995 to 2013, and while we document strong support for the relevance of earnings persistence in financial analysis and valuation, we fail to document a significant relationship between earnings persistence and long-term value orientation. These results are sensitive to different specifications, and additional results suggest that firms’ idiosyncratic risk (total risk) is relevant to explain the focus on short-term outcomes (short-termism) across firms. The main contribution of this paper is to offer empirical evidence for the relevance of accounting numbers in both valuation and contractual theories in an emergent market

Suggested Citation

  • Pimentel, Renê Coppe & Aguiar, Andson Braga de, 2016. "O papel da persistência dos lucros na acurácia de avaliação e no horizonte temporal," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 56(1), January.
  • Handle: RePEc:fgv:eaerae:v:56:y:2016:i:1:a:59352
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    1. Hou, Kewei & van Dijk, Mathijs A. & Zhang, Yinglei, 2012. "The implied cost of capital: A new approach," Journal of Accounting and Economics, Elsevier, vol. 53(3), pages 504-526.
    2. Black, Angela & Fraser, Patricia, 2002. "Stock market short-termism--an international perspective," Journal of Multinational Financial Management, Elsevier, vol. 12(2), pages 135-158, April.
    3. Frankel, Richard & Litov, Lubomir, 2009. "Earnings persistence," Journal of Accounting and Economics, Elsevier, vol. 47(1-2), pages 182-190, March.
    4. Fama, Eugene F & MacBeth, James D, 1973. "Risk, Return, and Equilibrium: Empirical Tests," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 607-636, May-June.
    5. Bernard, Victor L. & Thomas, Jacob K., 1990. "Evidence that stock prices do not fully reflect the implications of current earnings for future earnings," Journal of Accounting and Economics, Elsevier, vol. 13(4), pages 305-340, December.
    6. repec:bbz:fcpbbr:v:5:y:2008:i:2:p:143-162 is not listed on IDEAS
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