The University of Southampton
University of Southampton Institutional Repository

Non-operating earnings and firm risk

Non-operating earnings and firm risk
Non-operating earnings and firm risk
We find that non-operating earnings reduce total earnings volatility, stock price volatility, idiosyncratic risk, and crash risk. The risk-reducing effects of non-operating earnings are higher than those of operating earnings for risk measures based on stock market data. Non-operating earnings serve to mitigate risks among firms with operating losses, high financial leverage, high growth uncertainty, and low-ability managers.
earnings volatility, non-operating earnings, stock price crash risk, stock price volatility
1058-3300
1
Jory, Surendranath
2624eb24-850a-48f6-b3c6-c96749b87322
Ngo, Thanh
852ea7b9-fd74-4a39-9281-87626e50886b
Wang, Hongxia
d2fef2a2-9988-4d17-bd78-0d9107d0d054
Jory, Surendranath
2624eb24-850a-48f6-b3c6-c96749b87322
Ngo, Thanh
852ea7b9-fd74-4a39-9281-87626e50886b
Wang, Hongxia
d2fef2a2-9988-4d17-bd78-0d9107d0d054

Jory, Surendranath, Ngo, Thanh and Wang, Hongxia (2021) Non-operating earnings and firm risk. Review of Financial Economics, 1, [1111]. (doi:10.1002/rfe.1111).

Record type: Article

Abstract

We find that non-operating earnings reduce total earnings volatility, stock price volatility, idiosyncratic risk, and crash risk. The risk-reducing effects of non-operating earnings are higher than those of operating earnings for risk measures based on stock market data. Non-operating earnings serve to mitigate risks among firms with operating losses, high financial leverage, high growth uncertainty, and low-ability managers.

Text
Nonoperating_earnings_and_firm_risk - Accepted Manuscript
Download (196kB)

More information

Accepted/In Press date: 6 May 2020
e-pub ahead of print date: 15 June 2020
Published date: 12 January 2021
Keywords: earnings volatility, non-operating earnings, stock price crash risk, stock price volatility

Identifiers

Local EPrints ID: 441190
URI: http://eprints.soton.ac.uk/id/eprint/441190
ISSN: 1058-3300
PURE UUID: ee99da9b-751e-4713-8ab0-f386fd4bf714
ORCID for Surendranath Jory: ORCID iD orcid.org/0000-0002-8265-0001

Catalogue record

Date deposited: 04 Jun 2020 16:31
Last modified: 15 Jun 2022 04:01

Export record

Altmetrics

Contributors

Author: Thanh Ngo
Author: Hongxia Wang

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of http://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×