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References
For a general overview of similarities and differences between IFRS and US-GAAP, see PriceWaterhouseCoopers (2004).
See Czarnitzki and Kraft (2004). See Appendix 7.4 for some descriptive statistics of the sample by creditworthiness of companies.
See_section 3.2.1.3.
This proceeding is similar to the proceeding of Schröder (2003: 26).
The proceeding is similar to the methodology in Burgstahler and Dichev (1997).
An overview is provided by Heckman et al. (1999).
In most research a binary treatment is applied, i.e. the treatment variable can have two states. This is also done in the present case. However, in some research this approach has been extended to multiple state matching, see e.g. Gerfin and Lechner (2002), Czarnitzki et al. (2004).
The idea of determining the propensity scores via probit regressions goes back to Maddala (1983).
The matching is done with the assistance of the psmatch2 procedure by Leuven and Sianesi (2003).
See DeFusco et al. (2001: 459). Sometimes this multicollinearity level is even set at 0.7. However, it is not possible to rule out the existence of multicollinearity only based on pairwise correlations because there might be linear combinations of independent variables that are highly correlate
See Cook and Weisberg (1983). The results of the Cook-Weisberg test are shown in the respective tables of the regressions.
See Whelan and McNamara (2004: 10). The sample is characterised by a large number of pool members (cross section) relative to the total number of observations.
See Figure 33 on page 164 for an illustration of the changes in the macroeconomic and capital market environment during the sample period; some other studies run annual estimations to account for such a timely variation, see e.g. Brief and Zarowin (1999); Barth et al. (1998).
Consistently with a similar study of Burgstahler and Dichev (1997), the domain of ROE is divided into three parts with an equal number of observations.
Jan and Ou (1995) and Collins et al. (1999) also found that — when price is regressed on earnings — the coefficient on earnings is reliably negative for loss firms. While the first ones call it a “bewildering phenomenon” the second ones suggest that it is the omission of book value which induces the negative bias. However, in the present analysis book value is not omitted and the sign is still negative.
This is largely consistent with the findings of Barth et al. (1998).
A possible explanation for this is that companies with high capital intensity typically operate in low competition industries, see White et al. (1997: 189–190).
For more details about this approach, see Cochrane and Rubin (1973), Rosenbaum and Rubin (1985). The common support restriction does not change under this approach. Thus, the number of companies that are off-support remains at 3. The matching protocol is very similar to the protocol that is presented in figure 32.
For this analysis, industries are defined as groups of certain NACE classes. The classification is largely identical with that of Sofka and Schmidt (2004). For a list of all industries and NACE classes included in this study, see Appendix 7.3.
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(2006). Empirical Study. In: The Market Approach to Comparable Company Valuation. ZEW Economic Studies, vol 35. Physica-Verlag HD. https://doi.org/10.1007/3-7908-1723-6_5
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