Abstract
ABSTRACTThis paper employs panel smooth transition regression models with monetary policy proxies (interest rate and inflation rate) as the transition variables to estimate the earnings persistence of Taiwan’s companies. The impacts of monetary policy on the persistence of systematic earnings and unsystematic earnings are lagged and different, depending on monetary policy variables in different regimes. High lagged interest rates and lagged inflation rates increase the persistence of current unsystematic earnings and reduce the persistence of current systematic earnings. Specifying 1.315% as an inflation target level and providing an environment of high interest rates can maintain stable earnings persistence.
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Schedule a callMore From: Spanish Journal of Finance and Accounting / Revista Española de Financiación y Contabilidad
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