Earnings Response Coefficient in the MENA Region

Applied Economics Letters, 25(16): 1147-1152.

Posted: 21 Jan 2021

See all articles by Omar Farooq

Omar Farooq

The American University in Cairo

Nermeen F. Shehata

The American University in Cairo

Siva Nathan

Georgia State University

Date Written: 2018

Abstract

This article documents the earnings response coefficient (ERC) for nonfinancial firms listed in the Middle East and North Africa region during the period between 2003 and 2013. Our results show significantly positive ERC for our sample firms. The results are robust across different countries and different industries. Our results also show that ERC increases with increasing the measurement interval. It indicates that more information is incorporated in prices as the measurement interval increase. Consequently, we argue that significance of reported earnings is higher for long-term investors in the MENA region.

Keywords: Earnings response coefficient, stock returns, reported earnings, emerging markets

JEL Classification: G15, G34

Suggested Citation

Farooq, Omar and Shehata, Nermeen F. and Nathan, Siva, Earnings Response Coefficient in the MENA Region (2018). Applied Economics Letters, 25(16): 1147-1152., Available at SSRN: https://ssrn.com/abstract=3764518

Omar Farooq

The American University in Cairo ( email )

113 Kasr El Aini St., P.O. Box 2511
Cairo 11511
United States

Nermeen F. Shehata (Contact Author)

The American University in Cairo ( email )

AUC Avenue
P.O. Box 74, New Cairo 11835
Cairo
Egypt

Siva Nathan

Georgia State University ( email )

P.O. Box 4050
Atlanta, GA 30302-4050
United States
404-413-7225 (Phone)

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