The Roles of Accounting Valuations and Earnings Management in the Survivorship of Technology Firms during the Global Financial Crisis

This study examines the survivorship of technology firms listed on the NASDAQ market during the immediate and post-2008 global financial crisis period. Underpinned by contingency theory, this study demonstrates the varying roles of accounting valuation and earnings management metrics in the technology industry. Findings in this chapter show during the global financial crisis periods, technology firms have greater survivorships when they are undervalued, and possess a lesser degree of discretionary earnings (DA). The DA factor is a double-edged sword for technology firms since it has positive and negative effects on the returns and survivorships, respectively. The research and development (R&D) variable remains a positive component for both returns and survivorships of these firms.