Empirical Evidence on the Evolution of International Earnings

42 Pages Posted: 20 Jul 2000

See all articles by Judy Land

Judy Land

University of North Carolina (UNC) at Chapel Hill - Accounting Area

Mark H. Lang

University of North Carolina at Chapel Hill

Multiple version iconThere are 2 versions of this paper

Date Written: May 30, 2000

Abstract

We examine cross-country differences in the valuation and time series characteristics of earnings to assess whether there have been systematic changes over time. Our results suggest that earnings multiples have become more similar, although systematic differences remain. Potential economic determinants (e.g., growth rates, interest rates, and returns) do not exhibit similar convergence and do not appear to explain the changes. The convergence is robust to controls for cash flow multiples and is apparent in the valuation of accruals. Accrual/cash flow correlations have also become more similar and generally less negative, suggesting a reduction in earnings smoothing. Overall, our evidence suggests convergence in accounting practice.

Note: Previously titled "Empirical Evidence on the Evolution of Global Accounting"

Keywords: International accounting, International valuation, Accounting harmonization, Accounting multiples

JEL Classification: M41, M44, M47, G15

Suggested Citation

Land, Judy and Lang, Mark H., Empirical Evidence on the Evolution of International Earnings (May 30, 2000). Available at SSRN: https://ssrn.com/abstract=233602 or http://dx.doi.org/10.2139/ssrn.233602

Judy Land

University of North Carolina (UNC) at Chapel Hill - Accounting Area ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States
(919) 962-4727 (Phone)

Mark H. Lang (Contact Author)

University of North Carolina at Chapel Hill ( email )

Kenan-Flagler Business School
McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-1644 (Phone)
919-962-4727 (Fax)

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