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https://doi.org/10.21256/zhaw-28155| Publication type: | Article in scientific journal |
| Type of review: | Peer review (publication) |
| Title: | The disappearance of the zero-earnings discontinuity : SOX, dotcom boom or gradual decline? |
| Authors: | Chardonnens, Patrick Fiechter, Peter Wallmeier, Martin |
| et. al: | No |
| DOI: | 10.1016/j.frl.2022.103033 10.21256/zhaw-28155 |
| Published in: | Finance Research Letters |
| Volume(Issue): | 49 |
| Issue: | 103033 |
| Issue Date: | 2022 |
| Publisher / Ed. Institution: | Elsevier |
| ISSN: | 1544-6123 |
| Language: | English |
| Subjects: | Earnings management; Zero-earnings discontinuity; Sarbanes-Oxley Act (SOX); Dotcom boom; Earnings distribution; Loss avoidance |
| Subject (DDC): | 332.6: Investment |
| Abstract: | The zero-earnings discontinuity in the US disappeared around the time when the Sarbanes–Oxley Act (SOX) became effective, suggesting that SOX may have reduced the small loss avoidance by firms. In this paper, we examine a potential confounding effect arising from the dotcom boom at the turn of the millennium. Many newly listed dotcom firms had no revenues but high market capitalizations. Therefore, they mechanically fell into the smallest loss interval, artificially reducing the zero-earnings discontinuity. Once this dotcom effect is accounted for, our results no longer suggest a sharp (causal) effect of SOX on the decline in the zero-earnings discontinuity. |
| URI: | https://digitalcollection.zhaw.ch/handle/11475/28155 |
| Fulltext version: | Published version |
| License (according to publishing contract): | CC BY 4.0: Attribution 4.0 International |
| Departement: | School of Management and Law |
| Organisational Unit: | Institute for Financial Management (IFI) |
| Appears in collections: | Publikationen School of Management and Law |
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| 2022_Chardonnes-etal_Disappearance-of-the-zero-earnings-discontinuity.pdf | 630.66 kB | Adobe PDF |  View/Open |
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Chardonnens, P., Fiechter, P., & Wallmeier, M. (2022). The disappearance of the zero-earnings discontinuity : SOX, dotcom boom or gradual decline? Finance Research Letters, 49(103033). https://doi.org/10.1016/j.frl.2022.103033
Chardonnens, P., Fiechter, P. and Wallmeier, M. (2022) ‘The disappearance of the zero-earnings discontinuity : SOX, dotcom boom or gradual decline?’, Finance Research Letters, 49(103033). Available at: https://doi.org/10.1016/j.frl.2022.103033.
P. Chardonnens, P. Fiechter, and M. Wallmeier, “The disappearance of the zero-earnings discontinuity : SOX, dotcom boom or gradual decline?,” Finance Research Letters, vol. 49, no. 103033, 2022, doi: 10.1016/j.frl.2022.103033.
CHARDONNENS, Patrick, Peter FIECHTER und Martin WALLMEIER, 2022. The disappearance of the zero-earnings discontinuity : SOX, dotcom boom or gradual decline? Finance Research Letters. 2022. Bd. 49, Nr. 103033. DOI 10.1016/j.frl.2022.103033
Chardonnens, Patrick, Peter Fiechter, and Martin Wallmeier. 2022. “The Disappearance of the Zero-Earnings Discontinuity : SOX, Dotcom Boom or Gradual Decline?” Finance Research Letters 49 (103033). https://doi.org/10.1016/j.frl.2022.103033.
Chardonnens, Patrick, et al. “The Disappearance of the Zero-Earnings Discontinuity : SOX, Dotcom Boom or Gradual Decline?” Finance Research Letters, vol. 49, no. 103033, 2022, https://doi.org/10.1016/j.frl.2022.103033.
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