Appendix A: Literature Table Author(s) Object of Sample Methodology Outcome study Lev (1989) The usefulness 150 firms from the United States Regression analysis There is a weak relationship between of earnings and from which information is available relating stock returns reported earnings numbers and stock earnings on the Compustat Database for the to reported earnings returns. research period 1980-1984 Lundholm Tutorial on the Not applicable, Lundholm uses Lundholm uses the The Ohlson and Feltham-Ohlson models (1995) Ohlson and examples to explain how the MM algorithm to are proven to present a descriptive Feltham-Ohlson assumptions of the Ohlson and determine the representation of the accounting and framework Feltham-Ohlson models withhold strength of the valuation process and consequently are structural equations useful for value relevance researchers. for the assumptions in the models Hayn (1995) The information 85.919 years over the period Regression analysis The inclusion of loss cases dampens the content of 1962-1990 as available on the 1991 relating stock returns information content of earnings due to the reported losses release of the Compustat’s primary, to reported earnings shareholders liquidation option on assets. secondary and tertiary active and numbers considering research files samples with and without loss cases Amir and Lev The relevance of 560 firm-quarter observations in Regression analysis On a stand-alone basis accounting (1996) financial the United States (NYSE, AMEX relating stock returns numbers from telecom companies are statement and OTC) over the period to earning numbers largely irrelevant for valuation purposes. information in and book values to These results are argued to be relevant for the telecom equity value other science-based, high-growth sector markets.
Appendix A: Literature Table Author(s) Object of study Sample Methodology Outcome Lev (1989) The usefulness of earnings and earnings research 150 firms from the United States from which information is available on the Compustat Database for the period 1980-1984 Regression analysis relating stock returns to reported earnings There is a weak relationship between reported earnings numbers and stock returns. Lundholm (1995) Tutorial on the Ohlson and Feltham-Ohlson framework Not applicable, Lundholm uses examples to explain how the assumptions of the Ohlson and Feltham-Ohlson models withhold Lundholm uses the MM algorithm to determine the strength of the structural equations for the assumptions in the models The Ohlson and Feltham-Ohlson models are proven to present a descriptive representation of the accounting and valuation process and consequently are useful for value relevance researchers. Hayn (1995) The information content of reported losses 85.919 years over the period 1962-1990 as available on the 1991 release of the Compustat’s primary, secondary and tertiary active and research files Regression analysis relating stock returns to reported earnings numbers considering samples with and without loss cases The inclusion of loss cases dampens the information content of earnings due to the shareholders liquidation option on assets. Amir and Lev (1996) The relevance of financial statement information in the telecom sector 560 firm-quarter observations in the United States (NYSE, AMEX and OTC) over the period Regression analysis relating stock returns to earning numbers and book values to equity value On a stand-alone basis accounting numbers from telecom companies are largely irrelevant for valuation purposes. These results are argued to be relevant for other science-based, high-growth markets.