Operating cash flows asymmetric timeliness in Australia
thesisposted on 2022-03-28, 15:21 authored by Yimeng Yu
This thesis is the first study in Australia that examines the presence and determinants of operating cash flows asymmetric timeliness. Several explanations for cash flows asymmetry documented in the US studies are tested, including product pricing, cost stickiness and firm's life cycle. Using firm’s stock return as the proxy for economic news and 23,203 firm-year observations within the period of 1992-2012, the empirical results indicate that product pricing and cost stickiness are valid explanations for operating cash flows asymmetric timeliness. However, although firm’s life cycle has been found to have a significant effect on operating cash flows asymmetry in US studies, it is insignificant in Australia. Compared to US firms, 40 per cent of Australian listed firms are mining and resource firms with low sales in their early stages of life. Accordingly, analytical comparisons between mining and non-mining firms are carried out in this thesis. Mining firms are found to exhibit less operating cash flows asymmetric timeliness than non-mining firms. Given the important role of operating cash flows as the key indicator of firm performance and valuation, this research provides investors with an in-depth understanding of operating cash flows asymmetric timeliness, and contributes to the improvement of their forecasts and predictions of operating cash flows.