gender differential paper IJCRB

ijcrb.webs.com
JUNE 2011
INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 3, NO 2
payable−taxes payable−other current liabilities. To obtain cash flows per share we divide by the
number of common shares used to calculate primary earnings per share.
12. We also partitioned based on the cross-sectional median value of prior-year earnings changes
and SAR, however, our results are qualitatively the same.
13. This is around the time EVA became popular (Finegan, 1989).
14. Due to the potential bias in pooled t-statistics caused by cross-sectional correlations in the
error terms, we present ‘intertemporal’t statistics, computed as the mean of the 16 annual
coefficient estimates divided by the standard error of the 16 estimates. In addition, variance
inflation factors indicate the presence of multicolinearity in the pooled estimation, which also
biases the pooled standard errors. Intertemporal t statistics are not subject to this bias.
15. The first is based on using equation (1) and therefore contains information inEVAuseful in
predicting earnings changes. To form these predictions we use the average coefficients obtained
in equation (1) for all prior years. Our second prediction allows us to determine the incremental
value of including EVAC in equation (1). To form these predictions were-estimate equation (1)
without α5 and α6 (the EVA variables) each year. We then use the average of all previous-years’
coefficient estimates to form earnings predictions based on information excluding EVA.
Therefore, our results now start at year 1982.
16. Statistical tests of the MSE and MAE differences across models are done using the mean of
15 annual differences divided by the standard error of the mean.
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