Author details

Oliver Neoh and Matthias Nnadi\* School of Management, Cranfield University, Bedfordshire, UK

\*Address all correspondence to: matthias.nnadi@cranfield.ac.uk

© 2019 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

5. Conclusion and implication of study

survivorships.

74

Const �4.46

EP �9.76

BM �0.59

PS 0.44

MktCap 4.74\*\*

EBITDA �0.27

Salesg 2.23

JDA 0.33

R&D �5.25

Significance at 10% level. \*\*Significance at 5% level. \*\*\*Significance at 1% level.

Table 8.

accruals (JDA).

Adjusted R2

(�0.76)

(�0.67)

(�0.42)

(0.4)

(2.51)

(�1.1)

(1.1)

(1.34)

(�0.29)

4.44 (0.3)

48.08 (1.3)

12.86\*\*\* (3.66)

0.53 (0.19)

3.6 (0.76)

�0.63 (�1.01)

�3.71 (�0.73)

1.27\*\* (2.05)

155.82\*\*\* (3.36)

2.35 (0.09)

253.12\*\*\* (3.86)

19.89\*\*\* (3.19)

1.74 (0.35)

�1.08 (�0.13)

�0.71 (�0.64)

�5.91 (�0.65)

> 0.86 (0.78)

266.04\*\*\* (3.23)

We find that, during the global financial crisis periods, the technology firms have larger returns with undervaluation, larger firm size, and more discretionary earnings and R&D which increases more with longer terms. On the other hand, these firms have greater survivorships when they are undervalued, larger in size, have more R&D but with less discretionary earnings (DA). DA is a double-edged sword for the technology firms since it has positive and negative effects on the returns and survivorships, respectively. R&D is a positive component for both returns and survivorships of these firms. The moral hazard (ETHICS) tend to reduce the returns of these firms but do not have significant effect on their

Multivariate analysis on periodic returns of NASDAQ technology firms—using Jones model for discretionary

MODEL : ratþ<sup>p</sup> ¼ a þ b1EP þ b2BM þ b3PS þ b4MktCap þ b5EBITDA þ b6Salesg þ b<sup>7</sup> JDA þ b8R&D:

Accounting and Finance - New Perspectives on Banking, Financial Statements and Reporting

22.85 (0.51)

221.03\* (1.96)

23.38\*\* (2.18)

19.95\*\* (2.36)

�5.44 (�0.38)

�2.61 (�1.36)

0.31 (0.02)

4.46\*\* (2.36)

334.49\*\* (2.36)

F-test 2.55\*\* 4.80\*\*\* 6.25\*\*\* 3.48\*\*\* 2.47\*\* 3.80\*\*\* 1.36 1.18 1.95\*

N 350 350 350 350 241 241 275 275 275 The table shows the valuation and accounting variables' effect on the technology firms' returns from 2008 to 2010. The dependent variables are 3 months (3m), 6 months (6m), 1 year (1y), and 3 years (3y) returns of the technology firms. Then we use the earnings to price ratio (EP), book to market ratio (BM), price to sales ratio (PS), market capitalization (MktCap), EBITDA, sales growth (Salesg), Jones for discretionary accruals (JDA), and research and development (R&D) as our independent variables. The values in parentheses are the <sup>t</sup>-values to the corresponding coefficients. \*

Years 2008 2009 2010 3m 6m 1y 3y 3m 1y 3m 1y 5y

> 9.43 (1.56)

�28.35 (�1.27)

6.37\* (1.89)

0.42 (0.69)

�2.84\* (�1.69)

�0.07 (�0.46)

�0.24 (�0.52)

56.41\*\*\* (3.15)

0.03 0.08 0.11 0.05 0.05 0.09 0.01 0.01 0.03

1.2 (0.4) 0.93

2.63 (0.13)

�117.9 (�1.52)

22.56\* (1.93)

5.15\*\* (2.46)

�5.58 (�0.96)

�0.41 (�0.8)

(0.09)

0.9 (0.56)

286.01\*\*\* (4.61)

14.36\*\* (2.24)

�44.95 (�1.44)

�0.6 (�0.13)

�0.54 (�1.12)

�0.8 (�0.47)

�0.04 (�0.76)

> 6.17 (1.64)

�1.07 (�1.27)

4.51 (0.29)

�1.73 (�0.14)

> 15.39 (0.25)

�5.35 (�0.57)

0.63 (0.66)

�2.94 (�0.88)

�0.08 (�0.79)

�16.22\*\* (�2.19)

> 2.08 (1.26)

30.96 (0.99)

�76\* (�1.82)

> 22.41 (0.11)

�1.98 (�0.06)

�5.09 (�1.63)

33.93\*\*\* (3.07)

0.22 (0.64)

�17.08 (�0.7)

�2.77 (�0.51)

> 127.8 (1.24)
