2001 Fiscal Year Final Research Report Summary
Empirical Research on Cash Flow Information
| Project/Area Number |
12630158
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Accounting
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| Research Institution | Waseda University |
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Principal Investigator |
HAH Young Duke Waseda University, School of Commerce, Professor, 商学部, 教授 (70228378)
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| Project Period (FY) |
2000 – 2001
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| Keywords | Cash Flow / Accruals / Information Content / Ohlson Model / Value Relevance / Forecasting Relevance / Abnormal Earnings / Empirical Research |
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| Research Abstract |
During the research period, we have performed two empirical researches on cash flows, using our database comprised of over 27,000 samples firm-year listed on TSE, OSE, and NSE.
(1) Research on the additional information contents of cash flows
We explored the predictability of the three components of accounting earnings: cash flows, short-term accruals, and long-term accruals, and developed the prediction models of the components. We found that unexpected earnings, unexpected working capitals, and unexpected cash flows have value relevance. We clarified the relationship adding the dummy variables of the moderate changes and the severe changes of the earning components.
(2) Research on the value relevance of accruals and cash flows
We found that accrual and cash flow components of the earnings help to forecast future abnormal earnings and have persistence and value relevance. Basing the generalized version of Ohlson (1999) model, we constructed the accruals system and the cash flow system consisted with 4 equations each. The estimated parameter of the systems using seemingly unrelated regression technique showed that accruals and cash flows have the additional predictability each other, and have forecasting relevance and value relevance.
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