The impact of the global financial crisis on the persistence of the accrual anomaly: an empirical study

Abdullah Alawadhi & Mohammad Alkhamees

International Journal of Accounting and Finance2024https://doi.org/10.1504/ijaf.2024.10063095article
ABDC C
Weight
0.30

What the paper says

The global financial crisis left its mark on the investment landscape and posed challenges to both experienced and inexperienced investors alike. Some firms experienced investment cuts, dividend reductions, and a decrease in equity issuance, cash flow, and asset liquidation. Due to the crisis, the activities of both experienced and inexperienced investors were affected. In this study, we investigate whether the financial crisis had a lasting impact on the accrual anomaly. We find that the accrual anomaly remains stable and is largely unaffected by market anomalies. However, our study's results suggest that hedge funds have capitalised on the financial crisis by adopting long positions in companies with low accrual levels and short positions in those with high accruals, achieving abnormal returns exceeding 30%. Our findings offer valuable insights into how investors can navigate uncertain markets and maximise returns during times of economic uncertainty.

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https://doi.org/https://doi.org/10.1504/ijaf.2024.10063095

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@article{abdullah2024,
  title        = {{The impact of the global financial crisis on the persistence of the accrual anomaly: an empirical study}},
  author       = {Abdullah Alawadhi & Mohammad Alkhamees},
  journal      = {International Journal of Accounting and Finance},
  year         = {2024},
  doi          = {https://doi.org/https://doi.org/10.1504/ijaf.2024.10063095},
}

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The impact of the global financial crisis on the persistence of the accrual anomaly: an empirical study

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Evidence weight

0.30

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.