Evidence that financing decisions contribute to the zero-earnings discontinuity

In this paper we argue that financing decisions contribute to the zero-earnings discontinuity. We find a discontinuity in the distribution of earnings before tax and earnings before special items, but not in the distribution of earnings before interest which suggests that interest expense contribute...

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Bibliographic Details
Main Authors: Naser Makarem, Hong Liu, Lei Chen
Format: Default Article
Published: 2022
Subjects:
earnings distribution
earnings discontinuity
earnings management
financing decisions
debt issuance
Online Access:https://hdl.handle.net/2134/20056922.v1
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