The effect of smoothing by ex-military CEOs on current stock price informativeness about future earnings (FERC)
| Variables | Rt | Rt | Rt |
|---|---|---|---|
| Xt − 1 | −0.076*** (−12.969) | −0.074*** (−10.356) | −0.073*** (−9.902) |
| Xt | 0.015*** (2.645) | 0.019*** (2.896) | 0.014** (2.039) |
| Xt3 | 0.015*** (5.749) | 0.020*** (6.720) | 0.019*** (6.168) |
| Rt3 | −0.074*** (−25.766) | −0.073*** (−24.616) | −0.075*** (−24.324) |
| SMTHt − 4,t | 0.001 (0.176) | 0.002 (0.525) | |
| SMTHt − 4,t × Xt − 1 | 0.003 (0.611) | 0.004 (0.744) | |
| SMTHt − 4,t × Xt | 0.005 (0.953) | 0.004 (0.706) | |
| SMTHt − 4,t × Xt3 | 0.008*** (3.372) | 0.006*** (2.763) | |
| SMTHt − 4,t × Rt3 | 0.009*** (3.011) | 0.006** (2.065) | |
| MILITARY_CEOt | −0.017 (−1.226) | ||
| MILITARY_CEOt × Xt − 1 | −0.020 (−0.699) | ||
| MILITARY_CEOt × Xt | 0.074*** (3.213) | ||
| MILITARY_CEOt × Xt3 | 0.009 (0.934) | ||
| MILITARY_CEOt × Rt3 | 0.020** (2.084) | ||
| MILITARY_CEOt × SMTHt − 4,t | −0.017 (−1.339) | ||
| MILITARY_CEOt × SMTHt − 4,t × Xt − 1 | −0.012 (−0.386) | ||
| MILITARY_CEOt × SMTHt − 4,t × Xt | 0.011 (0.384) | ||
| MILITARY_CEOt × SMTHt − 4,t × Xt3 | 0.035** (2.495) | ||
| MILITARY_CEOt × SMTHt − 4,t × Rt3 | 0.023** (2.223) | ||
| Constant | 0.254*** (10.725) | 0.251*** (10.608) | 0.252*** (10.532) |
| Observations | 31,644 | 31,644 | 31,644 |
| Firm FEs and year FEs | YES | YES | YES |
| Type | OLS | OLS | OLS |
| Adj. R-squared | 0.179 | 0.179 | 0.180 |
| Variables | |||
|---|---|---|---|
| −0.076 | −0.074 | −0.073 | |
| 0.015 | 0.019 | 0.014 | |
| 0.015 | 0.020 | 0.019 | |
| −0.074 | −0.073 | −0.075 | |
| 0.001 (0.176) | 0.002 (0.525) | ||
| 0.003 (0.611) | 0.004 (0.744) | ||
| 0.005 (0.953) | 0.004 (0.706) | ||
| 0.008 | 0.006 | ||
| 0.009 | 0.006 | ||
| MILITARY_CEOt | −0.017 (−1.226) | ||
| MILITARY_CEOt × | −0.020 (−0.699) | ||
| MILITARY_CEOt × | 0.074 | ||
| MILITARY_CEOt × | 0.009 (0.934) | ||
| MILITARY_CEOt × | 0.020 | ||
| MILITARY_CEOt × | −0.017 (−1.339) | ||
| MILITARY_CEOt × | −0.012 (−0.386) | ||
| MILITARY_CEOt × | 0.011 (0.384) | ||
| MILITARY_CEOt × | 0.035 | ||
| MILITARY_CEOt × | 0.023 | ||
| Constant | 0.254 | 0.251 | 0.252 |
| Observations | 31,644 | 31,644 | 31,644 |
| Firm FEs and year FEs | |||
| Type | |||
| Adj. | 0.179 | 0.179 | 0.180 |
This table reports the regression results of current stock returns on future earnings, incorporating the three-way interaction among future earnings, income smoothing and CEOs’ ex-military experience, along with other control variables. The dependent variable, Rt is the ex-dividend stock return for Fiscal Year t. MILITARY_CEO is an indicator variable that equals one if the CEO of the firm in a given year has prior military experience, and zero otherwise. Standard errors are clustered at the firm level. The t-statistics are reported in parentheses below. ***, ** and * denote two-tailed significance at the 0.01, 0.05 and 0.10 levels, respectively. All variables are defined in Appendix 1
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