THE EFFECT OF ASSESTS WRITE ON THE FIRM’S PERFORMANCE

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Min -Tsung Cheng

Abstract

This study uses empirical evidence to determine if management recognitionasset write-offs improves firm performance. The examination focuses ontake-a-bath and information content strategies. The available research onmanagement write-offs behavior presents conflicting results, some of whichare interesting. First, for samples positioned at the 1%, 10%, 20%, 90%and 99% quantile level of firm performance ranking, a number of write-offswas found to positively affect the firm’s future performance, supporting theinformation content hypothesis. However, least squares estimates indicateda negative relationship. Second, under the least squares approach, firmperformance was improved in the period following the write-offs at variousquantiles, both of which support the take-a-bath hypothesis. Third, testingthe equality of individual points can ensure the requisites for quantileanalysis and most two-by-two matching coefficients had significant odds.Keywords: Quantile regression, asset write-offs, take-a-bath, information

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How to Cite
-TSUNG CHENG, Min. THE EFFECT OF ASSESTS WRITE ON THE FIRM’S PERFORMANCE. Management & Accounting Review (MAR), [S.l.], v. 15, n. 1, p. 63-93, june 2016. ISSN 2550-1895. Available at: <http://arionline.uitm.edu.my/ojs/index.php/MAR/article/view/563>. Date accessed: 16 jan. 2018.
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