Open AccessDeterminants of Earnings Response Coefficient in the Nigerian Post-IFRS Implementation Era
Author(s) -
Sunny Biobele Beredugo
Publication year - 2021
Publication title -
asian journal of economics, business and accounting
Language(s) - English
Resource type - Journals
ISSN - 2456-639X
DOI - 10.9734/ajeba/2021/v21i730399
Subject(s) - earnings response coefficient , earnings , stock exchange , business , accounting , sample (material) , population , actuarial science , finance , medicine , chemistry , chromatography , environmental health
Aims: The study assessed the determinants of earnings response coefficient in the Nigerian Post-IFRS implementation era. It critically looked at the impact of investors' protection, earnings persistency, and systematic risks on earnings response coefficients.
Study design: The study adopted an ex-post facto research design.
Methodology: A sample of 35 companies was drawn from the population of the listed companies in the Nigerian Stock Exchange between 2013 to 2020. Secondary data was used. The Generalized Least Square was used to test the hypotheses
Results: The study shows that the earnings response coefficient improves with the influence of investors’ protection, systematic risk, and earning persistency. Although the influence from systematic risk brings about an inverse effect on ERC, it is a fundamental determinant nonetheless. It was recommended that firms should improve on their investors' protection and that their financial reports should be designed to improve the information contents of accounting earnings to include inherent socio-economic risk, past and prospective earnings.