From 1996 to 1998, listed companies in China were required to achieve a minimum return on equity (ROE) of 10 percent in each of the previous three years before they could apply for permission to issue additional shares. Hence, there was a heavy concentration of ROEs in the area of just above 10...

When the U.S. corporate income tax rate was increased from 34 to 35 percent in August 1993, corporations had to remeasure their deferred tax assets and liabilities and include the net adjustment in their 1993 third-quarter earnings. This study shows that, at the time of the earnings...