Faculty Scholarship 1994 - Present

Value Relevance of Operating Income Versus Non-Operating Income in the Taiwan Stock Exchange

Taiwanese firms generally have a higher proportion of non-operating income than US and UK firms. Taiwan also has many investors who focus only on short-term returns and ignore risks. It therefore is possible that non-operating income is at least as value relevant as operating income in the Taiwan Stock Exchange. Results show that valuation models based on earnings components have a higher explanatory power than those based solely on earnings. The contribution of non-operating income is not significantly different from that of operating income.