Earnings Persistence and Business Strategies: An Indian Analysis

Abstract

Earnings of the firm are a vital tool for the evaluation of company's performance. Stakeholders as well as shareholders take decisions after analysing earnings and its growth prospects. This brings the concept of earnings persistence. If earnings are not steady, the returns of the firm in the future will decline and stakeholders as well as shareholders will lose out their money. This paper captures the earnings persistence of firms in India. This paper also captures the various business strategies adopted by firms to enhance their earnings. On the basis of various strategies, firms are classified into four groups. This paper has applied panel regression methodology.