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The effect of ex ante and ex post conservatism on the cost of equity capital: a quantile regression approach for MENA countries

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This paper aims to provide a deeper understanding of the relationship between accounting conservatism and the cost of equity capital (COEC). For this purpose, we use the quantile regression (QR) framework and examine the effect of two dimensions of conservatism (ex ante and ex post) on the COEC. This methodological contribution allows us to test whether the effect of the two forms of conservatism vary across the full distribution, especially at the extreme quantiles of the COEC. Empirical results from the QR reveal that the effect of the two dimensions of conservatism considerably differs across COEC quantiles.
Original languageEnglish
Pages (from-to)239-255
Number of pages17
JournalResearch in International Business and Finance
Volume44
Early online date8 Jul 2017
DOIs
Publication statusPublished - 17 Apr 2018

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