ScholarWorks@숙명여자대학교

초록

[Purpose] This paper empirically tests whether the predictive power of the cash－ flows and the earnings’ future cash－flows are influenced on ownership of foreign investors. We measure firm’s value by the present value of future cash－flows, so investigating prediction power of future cash－flows expected to have sufficient significance to all market participants, including foreign investors. [Methodology] Therefore we first examine that cash－flows and earnings, which items can be more predict future cash－flows. And we also assess cash－flows and earnings have additional future cash－flows prediction influencing on foreign ownership. After this we can find out which earnings contents are more considered about predicting future cash－flows by foreign investors, current cash－flows or current earnings. [Findings] We find that current earnings are stronger then current cash－flows about predicting future cash－flows predictabilities and each of these has a significant relationship. But, foreign investors showed high considering the company as an investment destination that the predictive power through cash flow than earnings one. The result shows that foreign investors, as a sophisticated investor, recognize accounting earnings are included accruals may be a means of earnings managements, relative to current cash－flows, they could be prefer to make a investment decision through current cash－flows. [Implications] This research is different from prior research in that foreign investors as known as holding a superior analysis capabilities, may have more interest in cash－flows on the basis of investment return then earnings.

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