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Volume 2, Number 4 / December 1998 , Pages 245-310
Multinational Finance Journal, 1998, vol. 2, no. 4, pp. 245-267
Eva K. Jermakowicz , University of Southern Indiana, USA    Corresponding Author
Sylwia Gornik-Tomaszewski , Baldwin-Wallace College, USA

Abstract:
This article investigates the association between stock returns and the annual earnings, derived from the new accounting and reporting standards, of firms listed on the Warsaw Stock Exchange between 1995 and 1997. Following a brief history of the Warsaw Stock Exchange, two major issues affecting the effectiveness of the Polish securities market are discussed. These are the transition process from public to private enterprise ownership, and the development of accounting and reporting standards compatible with the capital market requirements and the European Union regulation. The empirical results indicate significant association between stock returns and the annual earnings. Results are compared with those for more developed capital markets.

Keywords : accounting and reporting standards Poland; earnings and returns; privatization; Warsaw Stock Exchange
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Multinational Finance Journal, 1998, vol. 2, no. 4, pp. 269-293
Emeka T. Nwaeze , Rutgers University, U.S.A    Corresponding Author

Abstract:
This article focuses on regulation and variation in rate structures to investigate asymmetric return responses to positive and negative abnormal earnings. The abnormal earnings (AE) metric is measured as the difference between the actual profit rate and the maximum allowed profit rate, scaled by the beginning-period price. The analysis is motivated by the anticipated asymmetry in the information contents of positive and negative AE induced by existing rate structures which permit utilities to recover below normal profits but allow them to retain abnormal profits. Accordingly, negative AE is expected to be largely transitory and price-irrelevant whereas positive AE is expected to persist and be price-relevant. The results reveal significant asymmetry in return responses to positive and negative AEs. Specifically, the magnitude of return responses is larger for positive than for negative AEs. The results further show variations in the magnitudes of price responses across regulatory structures.

Keywords : abnormal earnings; asymmetric return responses; egulatory structure
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Multinational Finance Journal, 1998, vol. 2, no. 4, pp. 295-310
Christopher Korth , Western Michigan University, USA    Corresponding Author
Zane Swanson , Emporia State University, USA
Robert Singer , Quincy University, USA

Abstract:
Most of the Eastern European countries are burdened by heavy foreign debts. Securitization could be helpful in solving the vexing problem of servicing the debt of Eastern European countries and improving their financial situation. Three formats for securitizing the loans are broadly available. While all three formats could be used to enhance significantly the marketability of existing Eastern European debts, create a more favorable lending climate for new syndicated loans, and accelerate the development of large, integrated secondary markets, the analysis indicates that the mortgage-backed bond provides the best alternative

Keywords : securitization; Eastern Europe; loans and financial Intermediaries
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