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on Discrete Choice Models |
| By: | DING, Yuan; JEANJEAN, Thomas; STOLOWY, Hervé |
| Abstract: | Historically, the format of financial statements has varied from one country to another. Recently, due to the attractiveness of their capital markets, the strength of their accounting professions and the influence of their institutional investors, Anglo-American countries have seen the impact of their accounting practices on other nations increase steadily, even influencing the actual format of financial statements. Given that French accounting regulations allow a certain degree of choice in consolidated balance sheet format (‘by nature’ or ‘by term’) and income statement format (‘by nature’ or ‘by function’), this study examines a sample of 199 large French listed firms in an attempt to understand why some of these firms do not use the traditional French formats (‘by nature’ for the balance sheet and ‘by nature” for the income statement), instead preferring Anglo-American practices (‘by term’ format for the balance sheet and ‘by function’ format for the income statement). We first analyze the balance sheet and income statement formats separately using a logit model, then combine the two and enrich the research design with a generalized ordered logit model and a multinomial logit regression. Our results confirm that the major driving factor behind the adoption of one or two alternative formats is the firm’s degree of internationalization, not only financial (auditor type, foreign listing and the decision to apply alternative accounting standards) but also commercial (company size and the internationalization of sales). |
| Keywords: | Disclosure; Determinants; Financial Statements; Alternative format; France; Logit; Generalized ordered logit; Multinomial logit |
| JEL: | M41 |
| Date: | 2005–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0808&r=dcm |
| By: | Alexis Derviz; Jiří Podpiera |
| Abstract: | In this paper we investigate the determinants of the movements in the long-term Standard & Poors and CAMELS bank ratings in the Czech Republic during the period when the three biggest banks, representing approximately 60% of the Czech banking sector’s total assets, were privatized (i.e., the time span 1998–2001). The same list of explanatory variables corresponding to the CAMELS rating inputs employed by the Czech National Bank’s banking sector regulators was examined for both ratings in order to select significant predictors among them. We employed an ordered response logit model to analyze the monthly long-run S&P rating and a panel data framework for the analysis of the quarterly CAMELS rating. The predictors for which we found significant explanatory power are: Capital Adequacy, Credit Spread, the ratio of Total Loans to Total Assets, and the Total Asset Value at Risk. Models based on these predictors exhibited a predictive accuracy of 70%. Additionally, we found that the verified variables satisfactorily predict the S&P rating one month ahead. |
| Keywords: | Bank rating, CAMELS, ordered logit model, panel data analysis. |
| JEL: | C53 E58 G21 G33 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:1/2004&r=dcm |