Abstract

https://ssrn.com/abstract=2347193
 


 



Stock Prices and Earnings: A History of Research


Patricia M. Dechow


University of California, Berkeley - Accounting Group

Richard G. Sloan


University of California, Berkeley - Accounting Group

Jenny Zha Giedt


University of California, Berkeley; George Washington University

October 18, 2013

Annual Review of Financial Economics, Vol. 6: 343 -363 (Volume publication date December 2014).

Abstract:     
Accounting earnings summarize periodic corporate financial performance and are key determinants of stock prices. We review research on the usefulness of accounting earnings, including research on the link between accounting earnings and firm value and research on the usefulness of accounting earnings relative to other accounting and nonaccounting information. We also review research on the features of accounting earnings that make them useful to investors, including the accrual accounting process, fair value accounting, and the conservatism convention. We finish by summarizing research that identifies situations in which investors appear to misinterpret earnings and other accounting information, leading to security mispricing.

Number of Pages in PDF File: 41

Keywords: earnings, stock prices, accruals, conservatism, fair value, anomalies

JEL Classification: G12, M41


Open PDF in Browser Download This Paper

Date posted: October 30, 2013 ; Last revised: February 26, 2015

Suggested Citation

Dechow, Patricia M. and Sloan, Richard G. and Zha Giedt, Jenny, Stock Prices and Earnings: A History of Research (October 18, 2013). Annual Review of Financial Economics, Vol. 6: 343 -363 (Volume publication date December 2014). . Available at SSRN: https://ssrn.com/abstract=2347193 or http://dx.doi.org/10.2139/ssrn.2347193

Contact Information

Patricia M. Dechow
University of California, Berkeley - Accounting Group ( email )
Haas School of Business
Berkeley, CA 94720
United States
Richard G. Sloan (Contact Author)
University of California, Berkeley - Accounting Group ( email )
Haas School of Business
Berkeley, CA 94720
United States
Jenny Zha Giedt
University of California, Berkeley ( email )
Haas School of Business
2220 Piedmont Avenue
Berkeley, CA 94720
United States
George Washington University
2201 G Street
Washington, DC 20052
United States
Feedback to SSRN


Paper statistics
Abstract Views: 11,469
Downloads: 2,207
Download Rank: 4,322