Faculty Scholarship 1994 - Present

Increasing Earnings Firms and Their Characteristics: Evidence from the Taiwan Stock Market

Barth et al. (1999) show that increasing earnings firms in the U.S. have higher price-earnings multiple. This study investigates the applicability of their results to Taiwan's stock market, which has different institutional and investor characteristics. Results consistently show that earnings of increasing earnings firms have higher persistence that those of other firms. Foward stepwise discriminant analysis is also performed to examine the differences in firm characteristics. Increasing earnings firms tend to have higher market value of equity to book value of debt, and sales to total assets ratios.