Valuation of loss firms in a knowledge-based economy

• 成果类型: Article
• 署名作者: Darrough, Masako; Ye, Jianming
• 署名单位: City University of New York (CUNY) System; Baruch College (CUNY)
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-006-9022-z
• 发表日期: 2007
• 页码: 61-93
• 关键词: information-content; book value; equity; earnings; conservatism; Timeliness

摘要

Recent research in accounting has documented a substantial increase in the number of loss firms. Existing theories on the valuation of loss firms are based on adaptation/abandonment options or limited liability, assuming that these firms are operationally distressed. In this paper, we show that many loss firms do not fit this stereotype and identify the primary value drivers of this new type of loss firms. Our analysis helps resolve the puzzling negative relation between earnings and market value documented in prior research. Overall, our findings underscore the importance of hidden assets or intangibles in the study of loss firms.