Evidence that financing decisions contribute to the zero-earnings discontinuity
研究发现税前收益和特殊项目前收益分布存在间断点，但息前收益没有，说明利息费用导致了零收益间断点；同时债务发行水平分布也存在相应间断点，且两者同时消失，表明债务水平是零收益间断点的成因。
Abstract In this paper we argue that financing decisions contribute to the zero-earnings discontinuity. We find a discontinuity in the distribution of earnings before tax and earnings before special items, but not in the distribution of earnings before interest which suggests that interest expense contributes to the zero-earnings discontinuity. To investigate the role of interest expense in the zero-earnings discontinuity, we further show that there was a discontinuity in the distribution of the level of debt issues around zero earnings contemporaneous with the zero-earnings discontinuity. We also show that the recent disappearance of zero-earnings discontinuity is coincident with the disappearance of the discontinuity in the debt issuance distribution. Overall, our findings suggest that the level of debt contributed to the zero-earnings discontinuity when it existed.