Table 1 Measurement and operationalization of variables
Operationalization of variables | Definition of variables | Measurement of variables | Sources | A priori Sign |
|---|---|---|---|---|
SP | Share price (dependent variable) | As a result of the documented inefficiency of the Nigerian capital market hitherto identified in the study, the time duration at which earnings surprise information is impounded in share price is not exactly known. This is because accounting information is not contemporaneously associated with share price. Therefore, the earnings surprise information in the context of the Ohlson [27] framework is employed four months after year end. Consequently, the study measured share price as the average price per share at the end of four months after the statement of financial position date so as to accommodate the effect of the documented inefficiency | Omokhudu and Ibadin [29] | |
ESUR | Earnings surprise (independent variable) | It is measured as the difference between actual EPS and forecast EPS Forecast EPS is derived from an (1) earnings model | + | |
CFO | Cash flow from operation (control variable) | CFO scaled by total assets | Shehu and Abubakar [31] | + |
FSIZE | Firm size (control variable) | It is measured by the natural log of total assets | + |