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Forecasting and Analysis of Corporate Financial Performance with an Econometric Model of the Firm

Published online by Cambridge University Press:  19 October 2009

J. Walter Elliott
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Extract

Understanding and predicting various aspects of the financial performance of corporations have been undertaken almost entirely on the basis of assumed one-way statistical relationships which rely on some aspects of internal corporate behavior being exogenous to other aspects of behavior. When financial performance variables involved in such studies are jointly determined as parts of a simultaneous system of financial performance, this approach cannot be expected to produce useful results, because it is well known that obtained statistical results are biased and inconsistent.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 7 , Issue 2 , March 1972 , pp. 1499 - 1526
Copyright
Copyright © School of Business Administration, University of Washington 1972

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