Causality between cash flow and earnings – evidence from Tehran (Iran) Stock Exchange

Nasseri, A, Sayyadi, M, Yazdifar, H, Eskandari, R and Al Bahloul, M 2017, 'Causality between cash flow and earnings – evidence from Tehran (Iran) Stock Exchange' , Journal of Emerging Market Finance . (In Press)

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Abstract

This paper employs the data from 155 companies from 27 different industries listed on the Tehran Stock Exchange (TSE) for the period from 2000 to 2009 to examine the direction of causality between cash flow and earnings after taking consideration of stationarity and co-integration. The results indicate that there is a bidirectional causal relationship between cash flow and earnings at the level of all individual companies, so that cash flow variables caused earning variables and vice versa. However, at the level of industrial sectors, causality exists only between Profit before Interest and Taxation (EBIT) and Cash Flow from Operating Activities (CFOA).

Item Type: Article
Schools: Schools > Salford Business School
Journal or Publication Title: Journal of Emerging Market Finance
Publisher: SAGE Publications
ISSN: 0972-6527
Depositing User: Professor Hassan Yazdifar
Date Deposited: 11 Sep 2017 08:48
Last Modified: 11 Sep 2017 09:02
URI: http://usir.salford.ac.uk/id/eprint/43727

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