An Empirical Study on Changes in Fair Value, Separation of Control Right and Cash flow Right and Earnings Volatility

Abstract

Since the introduction of fair value, its application and economic consequences have become the focus of research. This paper investigates whether fair value changes have an impact on earnings volatility over 2009-2016 periods. The results find that fair value changes does have a significant positive effect on earnings volatility, in addition, the separation of the control right and cash flow right plays a positive regulatory role in state owned companies, but disaffinity results are found when considering the nonstate-owned companies.